Shinhan Asset Management Publishes '2023 ESG Investment Market Outlook'

"2023, Expected to Be the First Year When Financial Burden of Carbon Emissions Is Felt"

[Asia Economy Reporter Kwangho Lee] Shinhan Asset Management announced on the 30th that it published the ‘2023 ESG Investment Market Outlook’ report and distributed it to sales companies and institutional investors on the same day.

The report, published for the second consecutive year following last year, contains changes and outlooks in the market related to ESG investment. It is composed of two parts: a review of this year’s ESG investment market and the outlook for the upcoming 2023 ESG investment market.

According to the report, the global ESG investment market size slightly contracted this year due to the decline in global stock markets, but net inflows into global sustainable funds continued, performing better than general funds which turned to net outflows.

The report diagnosed that as interest and discussions on ESG increase, ESG investment is currently “experiencing growing pains at the gateway from a niche to the mainstream.” This is because surveillance against greenwashing has emerged, and especially in the United States, sharp conflicts of opinion on ESG have appeared, leading to a somewhat cautious atmosphere among major asset management companies regarding the expansion of ESG investment.

Regarding the 2023 ESG investment market, it is expected that it will be difficult to see the large growth seen in 2020 and last year, but thanks to the expansion of eco-friendly investment destinations and the increased execution of ESG-type funds by pension funds, a slight growth trend is expected to be maintained. In particular, investment products focusing on the environmental (E) theme among ESG factors are expected to be mainly launched.

Shinhan Asset Management, known as the ‘house of ESG investment,’ is the first domestic asset management company to send carbon-neutral shareholder letters and questionnaires to investee companies.

Son Miji, Deputy Head of the ESG Strategy Team at Shinhan Asset Management, who authored the report, stated, “2023 is expected to be the first year when the financial burden of carbon emissions is felt, and related risks should be reflected in investment decisions.” She also diagnosed, “It will be the inaugural year for active shareholder engagement activities by domestic asset management companies, and there is a high possibility that full-scale discussions on domestic ESG fund standards will proceed in line with overseas regulatory trends.”

This content was produced with the assistance of AI translation services.