The focus on environmental, social and governance issues in Asia continues to gather pace. More companies are making disclosures, more regulators require it, and investors are asking more questions.
Rather than assigning scores or ratings, we take an integrated approach that focuses on the issues that are, or will, become material for businesses. It’s hard work, time consuming and frustrating at times.
However, we think this offers a deeper analysis and understanding of how ESG affects the future course of a company, rather than a picture of where it is now. And the relative paucity of ESG information and data in Asia lends itself particularly to integrated analysis and engagement.
Over the past six months we undertook a more in-depth integration exercise. We looked closely at 10 sectors in the region, integrated ESG into almost one-quarter of our Asian equity research coverage, and made changes to many of our company forecasts and valuations.
While each sector in Asia faced its own individual risks, and in some cases opportunities, even within sectors we found different companies were exposed to ESG in their own unique ways.