Why ESG in Asia can be a significant driver of investment outperformance

ESG in Asia

Asia’s vast and heterogeneous mix of countries, cultures, economies and markets, provides compelling opportunities for investors. Against this backdrop, there is also a wide diversity of adoption and awareness of ESG factors by companies, investors and governments.

David Sheasby - The Future of ESG in Asia Play Play Video
David Sheasby on the future of ESG in Asia

We believe these intra-regional differences and the asymmetrical rate of change we are seeing in Asia towards embracing more sustainable business practices can be a significant driver of investment performance.

However, because of the often nuanced differences between Asian companies, especially in terms of governance, there is no ‘one-size-fits-all’ approach. As active managers, with ESG analysis fully integrated in our investment process, we can gain a highly specific understanding of how Asian companies create long-term value for all their stakeholders. This lens of analysis will remain absolutely vital for understanding the changing complexity of ESG value drivers in Asia for years to come.

Intra-regional ESG differences and the quantum of ESG change in Asia can be a significant driver of investment outperformance.

1. ESG in Asia - An overview

The wide diversity of ESG adoption and awareness in Asia is a crucial factor to consider, both in terms of the risk and opportunity it presents.

Read more

2. How we apply ESG analysis in Asia

The heterogeneous nature of ESG factors in Asia means that a 'one-size-fits-all' approach to ESG analysis is ineffective. Instead, we take an adaptive, principles-based approach.

Read more

3. ESG in Asia - a future view

We see the rapid rate of change in ESG adoption and awareness in Asia likely to continue with several key ESG themes likely to have a long-term impact.

Read more

ESG in Asia

Executive summary

  • Levels of adoption and awareness of ESG factors by companies and investors in Asia spans a very wide spectrum.
  • Intra-regional ESG differences and the quantum of ESG change in Asia can be a significant driver of investment outperformance.
  • There is no ‘one-size-fits-all’ approach to ESG analysis in Asia.
  • Understanding the complexity of ESG value drivers in the region requires an active management approach with ESG analysis fully integrated in to the investment process.

View full report

Risk warnings – Investors should also be aware of the following risk factors which may be applicable to the strategy.
Investing in foreign markets introduces a risk where adverse movements in currency exchange rates could result in a decrease in the value of your investment.
Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. Accordingly, investment in emerging markets is generally characterised by higher levels of risk than investment in fully developed markets.

Register for email updates

Consultant and Institutional queries

Nigel Murdoch

Nigel Murdoch
Institutional sales, EMEA
T +44 (0) 131 479 4607
E @ NMurdoch

All contacts

Wholesale and retail queries

Legg Mason Global Asset Management

Legg Mason
T +44 (0) 20 7070 7444
E @ UKClientService

Legg Mason website