Asia gets its first FTSE4Good Index
The FTSE4Good ASEAN 5 Index has been launched to provide information to institutional investors interested in environmental, social and governance (ESG) investing in Asia. The index includes stocks listed in Indonesia, Malaysia, the Philippines, Singapore, and Thailand and has a net market capitalisation of $165.15bn. Companies in the index are assessed according to more than 300 indicators in the areas of ESG responsibility. ESG investing is gradually gaining traction in Asia due a growing recognition that it can have a positive effect on returns.

Singapore investors are being encouraged to get on board a global trend towards responsible investing, with the launch of an index that includes five companies listed here.

A growing number of investors across the world are looking at this type of investing, according to Ms Arisa Kishigami, head of ESG (Environmental, Social and Governance) for Asia-Pacific at global index provider FTSE Russell.

They are becoming more aware of the need to respond to global risks such as environmental sustainability and climate change, she said.

"A few years ago, investors were hesitant to embrace ESG strategies due to questions on the contribution to positive investment returns," she told The Straits Times in a recent interview.

"But the interpretation has been changing such that ESG factors are now increasingly considered investment-relevant and as part of the investment process."

Ms Kishigami added that this has also been the case for the Asean market, which has been steadily gaining traction among investors.