DBS Private Bank: 50% of assets to be sustainable by 2023
Doubling down on its sustainability agenda, leading Asian financial services group has announced that its private banking arm, DBS Private Bank, has committed to growing its suite of sustainable investments to more than half of its assets under management (AUM) by 2023, up from 41% today.
With this commitment, DBS is further entrenching its position as Asia’s industry leader in sustainability and galvanising its regional clients to adopt environmental, social and governance (ESG) standards in their investments.
The bank will also widen and deepen clients’ access to its ecosystem of social enterprises (SEs) in the region to fund, support and develop these enterprises, which include next-gen tech leaders that are innovating breakthrough solutions to positively impact communities.
These initiatives, part of DBS Private Bank’s three-pronged sustainability approach to drive ESG investing, advocate responsible business practices, and create social impact.
According to Joseph Poon, Group Head of DBS Private Bank, while “sustainable investments have become increasingly important in value-adding investment portfolios in the long run”, their pace of growth is being hampered as there is still no clear definition for sustainable investments today and no single established industry benchmark to rate ESG.
“We decided to take the lead in challenging this status quo, and were among the first in Asia to integrate MSCI ESG ratings into our product suite. By taking this step, we are not only availing greater transparency of our offerings, but are also holding ourselves accountable to our pledge to boost our share of sustainable investments.”
ESG in Asia catching up with the west
Asian assets tend to have lower ESG ratings than their Western counterparts, a reflection of a region that’s home to many developing nations still in early stages of economic development.
Asia has however started to catch-up in recent years, amid rising consumer expectations and government calls for businesses to focus on sustainability issues.
And DBS Private Bank, with its wide holdings of Asian assets, deep understanding of the region’s diverse heritage, and strong network of Asian clients, is well-positioned to play a leading role in ESG advocacy mobilising clients towards positive change.
Expanding its sustainable product suite
This year alone, the bank is looking at onboarding more than 10 sustainability products, comprising a range of exchange-traded funds, mutual funds and private equity investments. This includes a Global Environment Fund that will grant customers diversified exposure into a range of decarbonisation themes including Renewable Energy, Electrification and Resource Efficiency.
The bank will also review clients’ portfolios to improve their ESG rating through targeted advisory and recommendations and will formalise how ESG is assessed through the launch of a portfolio-weighted ESG rating methodology in Q2 – an Asia-first initiative that will move beyond rating individual holdings, to rating clients’ portfolios holistically.
Poon adds: “We’re privileged to be working with clients who are business-owners or in positions of influence, and are well-placed to drive positive change through their commercial enterprises; many also have the means and the desire to give back to society, not only through traditional philanthropy, but also by supporting social enterprises dedicated to addressing pertinent societal gaps.
"As a trusted partner on their wealth journey, our role has gone beyond growing and managing their wealth. Increasingly, we help our clients to “connect the dots” on multiple fronts so they can build meaningful and purposeful legacies for their future generations."
Asia-Pacific seeing surge in cleantech-focused VC funds
Cleantech became one of the hottest investment sectors among VCs a decade ago with cleantech VC deal volumes doubling between 2005-2007, according to Brookings Cleantech Venture Capital report. And while the global recession in 2007-2008 halted many investments in cleantech, the sector has gained traction over the last few years.
Asia Cleantech Capital is an early-stage investment firm focused on clean tech projects and companies in the APAC region; DreamLabs Innovation is a US$50m fund established to invest in disruptive, scalable, people-focused companies in areas including cleantech and energy; and ENGIE New Ventures runs a US$61.2m fund dedicated to making minority investment in tech startups in sustainable energy including across Asia.
More recently, in 2021, in light of the pandemic and increasing focus on sustainability, there’s been a surge of cleantech-focused VC funds being set up both globally and across Asia-Pacific with the aim of supporting startups that are developing advanced technologies to tackle global problems, whether renewable energy or food waste.
Climate Solutions Partnership unveiled
Just last week, HSBC, World Resources Institute (WRI) and WWF unveiled their Climate Solutions Partnership (CSP), which aims to unlock barriers to finance for innovators developing climate solutions with a focus on startups in Asia developing carbon-cutting technologies, projects that protect and restore biodiversity, and initiatives to help the transition to renewable energy.
Backed by US$100m of philanthropic funding over five years from HSBC, and part of the banking giant’s climate strategy, this partnership will help identify future business opportunities for sustainable innovations, and mobilise finance, including helping startups and next-generation new sustainable approaches.
Spotlight on Japan and China
Set to launch this month is a new cleantech-focused fund targeting investments in Japan, Europe and the US. Sony Group, Suzuki Motor, Mizuho Bank and 15 other Japanese companies have joined forces on a startup investment fund focused on companies that are developing technologies related to digital transformation and decarbonisation.
The fund, set up by California-based VC firm World Innovation Lab (WiL) with a maximum fund size of US$911m and a lifespan of 10 years, will invest in 50-60 startups in the first 3-5 years. Focused on the environmental sector, the fund is set to invest heavily in companies with digital technology, such as software and data analysis tools that can help streamline the operations of large companies, and those developing advanced technologies to tackle global problems, from water shortages to development of plastics-free products.
And the recently launched TDK Ventures, the corporate venture capital arm of Japanese multinational TDK Corporation, is scouting for more industrial tech investments in Asia and especially China, following the recent close of its US$150m TDK Ventures Fund II. This fund is targeting early-stage, global investments in ‘hard tech’ spanning the advanced materials, industrial, robotics, energy, autonomous vehicles, electric vehicles, clean-tech and health-tech verticals.
“This new fund renews our commitment to supporting hard-tech entrepreneurs creating innovations for the greater good,” says Nicolas Sauvage, managing director, TDK Ventures. The materials science field has always been part of the technology sector’s foundation, and as such, it can help the sector address some of the world’s biggest challenges, including sustainability.”
ADB Ventures brings a more sustainable future to Asia
Back in March, ADB Ventures, the Asian Development Bank’s venture capital arm, announced its first two investments since its founding in 2020. ADB Ventures, which aims to pursue environmental, social and governance (ESG) investments in verticals such as FoodTech, AgriTech, HealthTech, FinTech and CleanTech, revealed two green investments, funding Indian electric vehicle manufacturer Euler Motors and Indian CleanTech startup Smart Joules.
The firm is currently partnered with the Ministry for Foreign Affairs of Finland, the Climate Investment Fund, Nordic Development Fund, Korea Venture Investment Corp., and Korea’s Ministry of Economy and Finance to help bring a more sustainable future to Asia.
Nordic Development Fund managing director Karin Isaksson says: “ADB Ventures represents a timely complement to traditional development approaches through the involvement of the private sector in addressing critical climate change challenges. We are pleased to be working with the ADB on this important initiative that has particular relevance in the post-COVID recovery.”
And finally, while not exclusively tech-focused, last month Singapore-headquartered global gaming firm Razer announced the launch of its new (and first) sustainable US$50m fund. The Razer Green Fund aims to invest in environmental and sustainability startups with up to US$1m funding for startups in the seed and series A stages.