Insurance Asset Risk Asia 2022 conference’s third and last day looked at the latest sustainable finance trends in the region.
The audience heard that data is the key battleground for ESG investing over the next couple of years, particularly in emerging markets.
Many emerging markets are not covered by ESG data providers and investors are reluctant to invest there as a result, according to Liza Jansen, head of sustainable investing for Prudential.
This would make it impossible for these countries to meet their climate targets. But Asia is catching up fast when it comes to data availability, Robert Turnbull head AM Asia, managing director Swiss Re Asia, said.
As data availability improves, the lack of harmonised standards on disclosures but also on what type of data investors require will need to be tackled, Max Davies, insurance strategist at Wellington, noted.
Another panel highlighted how earmarking insurance premiums for ESG investment could advance sustainable finance in the region.
Although difficult, panellists agreed it wouldn’t be impossible to put this in place. Dylan Bryant, Green and Sustainable Insurance Working Group Co-Chair at Hong Kong Green Finance Association, said an example of linking liabilities to investment types already existed in the model of Islamic-compliant takaful insurance.
For Satoshi Ikeda, chief sustainable finance officer at the Japan Financial Services Agency, a game changer in the region would be if Asian countries started to issue green sovereign debt which could provide insurers the green assets they seek for their investments.
Miyuki Zeniya, Dai-ichi Life Holdings’ head of sustainable finance, cautioned insurers to take countries’ energy policies into account when considering investments in sovereign green bonds.
Source: Insurance Asset Risk