Taiwan leads Asia in share of ESG assets as dearth of options at home drive funds offshore in search of green energy investments

Taiwanese investors held more ESG assets as a total share of assets under management than any Asian economy in the third quarter of last year

Although socially responsible investing is taking off, Taiwan faces a number of hurdles – chief among them is a lack of established domestic ESG funds

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Major interest in ESG investment in Taiwan started to show about five years ago, analysts say. Photo: Bloomberg

Published: 2:30pm, 3 Apr 2021Updated: 2:25pm, 19 May 2021

A wave of environmental, social and governance (ESG) investment fervour is sweeping Taiwan, turning the island into a leader in Asia as the market for sustainable investing takes off.

Taiwanese investors held more ESG mutual fund and exchange traded fund assets as a total share of assets under management than any Asian economy in the third quarter of last year, Fitch Ratings estimated in February.

Though the range of Taiwanese ESG funds is still limited, the amount flowing into sustainable and ethical assets has ballooned from NT$31.2 billion (US$1 billion) in 2018, to NT$113.8 billion in 2019 and NT$211.4 billion last year, according to data from Fitch and Lipper for Investment Management.

Major interest in ESG investment in Taiwan started to show about five years ago, said Patricia Yeung, a research director with DBS Bank in Singapore.

The beauty of ESG is you can be a responsible investor and still expect a good return

Patricia Yeung

“I would say in Taiwan the fund managers or the high-net-worth investors have a relatively high awareness or appreciation in ESG,” Yeung said. “The beauty of ESG is you can be a responsible investor and still expect a good return.”

Elsewhere in Asia, Japan and South Korea share Taiwan’s gusto for socially responsible assets, she said.

Some US$38 trillion in ESG assets were under management globally in 2019, with Europe leading the way, analysis firm Research and Markets said in January. Europe’s market is maturing, the firm said, and ESG will eventually account for a “major share” of assets under management worldwide.