Retail investor capital presents US$35b growth opportunity for sustainable investing in Malaysia

PETALING JAYA: Malaysia could mobilise US$35 billion (RM165 billion) in sustainable retail investments by 2030, particularly the financing of climate transition, according to Standard Chartered’s Sustainable Banking Report 2022.

This capital could also play a critical part in bridging funding gaps in Malaysia’s other environmental, social and governance (ESG) priorities such as pollution and waste management.

The report said Malaysia has high potential for growth in sustainable investing, largely due to its significant population and rising domestic wealth. Across Malaysia, 36% of investors want to put their money towards addressing climate issues.

Greater access and transparency in the sustainable investment ecosystem could mobilise Malaysia’s retail capital potential in reaching its carbon neutrality targets, aside from other ESG issues of concern to retail investors, such as pollution, waste management and energy security.

Investors in Malaysia identified perceived low returns/higher risk (53%), accessibility (51%) and comparability (45%) as their top barriers to increasing their sustainable investments. The report further highlights the need for investor and market-specific barriers that need to be overcome to translate this investor interest into actual impact.

Standard Chartered Malaysia managing director and head of consumer, private and business banking Sammeer Sharma (pix) said its research showed that 72% and 86% of affluent and high net worth investors respectively in Malaysia have a high level of interest in sustainable investments, motivated by their desire to help restore the environment and hedge against ESG risks.

“The synergies between syariah-compliant investing and sustainable investments also present an opportunity to channel private capital towards sustainable investments.

“We know that a rapidly growing number of our clients want their investments to make a positive impact on the environment and in society, and there is significant appetite to take ESG investment from a niche play to a mainstream investment strategy.”

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