The Trend Of Sustainable Investment Is Increasingly Attracted, Value Of Funds Under Management For The 2016-2020 Period Reaches 35.3 Trillion US Dollars

Photo: Doc. BNP Paribas AM

JAKARTA - Continuous investment continues to penetrate the domestic mutual fund industry. One of the enthusiasts is PT BNP Paribas Asset Management (BNP Paribas AM).

According to the President Director of BNP Paribas AM Priyo Santoso, the trend of sustainable investment that applies the principles of Environmental, Social & Governance (ESG) in Indonesia will continue to increase and become increasingly relevant to current conditions. "This is in line with the government's focus both on addressing the issue of climate change and in pushing the financial services sector towards sustainable and inclusive growth, as voiced by representatives of the Indonesian government at the G20 Presidency meeting," said Priyo in his statement, quoted on Wednesday 29 June.

Sustainable investment itself has become an investment trend in the world. This can be seen from the data reported by the Global Sustainable Investment Review where there is an increase in the total funds under management for sustainable investments which increased by 55 percent in the 2016-2020 period (to 35.3 trillion US dollars).

Currently, BNP Paribas AM has three mutual funds with the ESG theme, namely the BNP Paribas SRI-KEHATI Index Mutual Fund which seeks to have a real positive impact on the environment and society, as well as the BNP Paribas Cakra Syariah USD Sharia Mutual Fund and the BNP Paribas Greater China Equity Sharia Mutual Fund. Sharia USD which applies an ESG filter in selecting the underlying securities.

Until May 2022, mutual fund managed funds with the ESG theme at BNP Paribas AM have reached IDR 5.5 trillion, an increase of almost five times compared to 2019 which was only around IDR 1 trillion.

Meanwhile, a survey conducted by BNP Paribas Asset Management Global & Greenwich Associates in June 2020 showed that 81 percent of respondents had implemented ESG-based investments and 16 percent planned to do the same.

As for 79 percent of respondents also believe that social considerations can have a positive impact on long-term investment performance as well as on risk management.

“We are proud because the momentum of our 30 years of existence in Indonesia also coincides with the government's focus at the G20 Presidency meeting towards a low-carbon economy and sustainable finance. This also motivates us to continue to promote the important role of sustainable investment and accelerate its implementation to investors," added Priyo.

According to the Indonesia Stock Exchange, in Indonesia it is also seen that more and more companies are starting to apply ESG principles in managing their businesses. Priyo responded, although the number of ESG-based issuers in the country is still limited, the increasing interest of investors in ESG-oriented investments is increasingly visible.

"This is also in line with the Government's efforts to encourage the implementation of businesses that apply good ESG standards," said Priyo.