Investment involves risk. Prices of investment products can be volatile and may become valueless. Past performance information not indicative of future performance. Investors should read in detail the offering documents and the Risk Disclosure Statement of the relevant investment products.
Importance of ESG and sustainability
Responsible for the future, create a sustainable society

KGI Asia strives to provide sustainable wealth solutions for clients, employees and society. We value long-term contributions to the sustainable development of the environment and society through effective investment strategies. Our ultimate goal is to offer a more harmonious and prosperous future, a rejuvenated physical and mental status to our investors while we have a key role to play in protecting the environment and creating a sustainable society for our next generation.

“Your investments may help shaping a healthy and vibrant planet!
We offer bespoke ESG product solutions to fulfill your investment goals and objectives, and capture the long-term growth opportunities”

What is ESG?
ESG stands for Environmental (E), Social (S) and Governance (G), which has been widely adopted to evaluate the long-term value of a company. In recent years, companies may also integrate the concept and factors of sustainable development into their long-term investment decisions.
Environmental
Climate Changes, Energy Efficiency, Air & Water Pollution, Waste Management, Lands / Soils Quality
Social
Human Capital, Labor Standards, Product Control, Information Safety, Equality
Governance
Accounting Standards, Anticompetitive Behavior, Audit Committee Structure, Board Member Diversity, Anti-Bribery & Corruption
What are the potential benefits from ESG investment?
A healthy living environment leads to a healthy life. All kinds of pollution and the greenhouse effect make beautiful nature and natural resources disappear, which affects us and our next generation.
Invest in the future and bring more positive changes to the planet for the sustainable benefit of you and your next generation.
ESG investment is not an illusory ideal concept, it’s a new focus supported by concrete reasons, and gradually become a mainstream investment strategy and new trend in the global financial market.

How may the companies be benefited by “protecting the environment, socially responsible, and outstanding governance” in a long run?
Reduce resources consumption, wastage e.g. electricity, water and paper consumption to save operating expenses in the long run
Improve corporate image, enhance employee loyalty and engagement while attract new talents with the overall improvement in corporate governance practices and social factors
Strengthen risk management and enhance the investment value by using the combinations of financial and ESG data & performance analysis

Generally speaking, high ESG-rated companies may be relatively easier in gaining strategic relaxations from regulatory policy easing and subsidies from the government
Characteristics of companies with higher ESG score
Companies with stronger ESG credentials are often benefit from improved productivity, enhanced profitability and lower cost with a balance of risk and reward in the long run.
Gross Profit
Greater competitive edge and excess returns generations, leading to better profitability and dividend payments
ESG trend at a glance

Is ESG investment simply a craze or a long-term investment?

Historical data* shows that investing in sustainable ESG companies enjoys a better return. Relatively, the trend is more notable in the EM investments

In terms of the asset size, global ESG assets are on track to exceed US$53 trillion by 2025, representing more than a third of the projected total assets under management. #

Increase in fund assets may reflect growing investors’ attention and recognition of ESG themes, in the meantime, capital inflows may enhance value of the related assets.

* Past performance information does not represent future performance
#Source:Bloomberg Intelligence: ESG assets may hit $53 trillion by 2025, a third of global AUM , 23 February 2021



Thinking of being a part of sustainable solutions?
ESG investment may help capture growth opportunities and mitigate the risk from the policies and trends, thus improving society and the environment. You could consider different ESG-themed investment with unique features including funds, bonds, and structured products to help contribute to sustainable society.

• Potential return appreciation
• Reduce portfolio risk
• Contribute to society and sustainability, as a responsible stakeholder
  • Geographical and Industry Diversification
  • Managed by professional fund managers
  • Access to various investment themes globally

SFC-authorized unit trusts and mutual funds – ESG funds***

  • BNP Energy Transition Fund
  • BlackRock Sustainable Energy Fund
  • AB Sustainable Global Thematic Portfolio
  • Schroder ISF Global Climate Change Equity Fund
  • BlackRock ESG Multi-Asset Fund
  • Allianz Food Security Fund
  • Ninety One Global Strategy Fund
  • Allianz Global Sustainability Fund
  • Neuberger Berman Short Duration High Yield Bond Fund


***Source: List of ESG Funds
  • Predictable income stream
  • Tradable in the secondary market with potential capital upside
  • Wide universe of bond issuers, currencies and tenor to choose from
  • Green Bonds
  • Social Bonds
  • Sustainable Bonds
  • Flexibly formulate products such as underlying equities, coupon, strike and tenor
  • Potential return generation and yield enhancement
  • Tailor-made risk and returns structure to cater different market situations
HK Stock

  • Swire Properties
  • CLP Group
  • Hang Seng Bank
  • HKEX
  • Power Assets
  • HSBC
  • AIA


US Stock

  • NVIDIA
  • Adobe
  • Deere & Co
  • Apple
  • Microsoft
  • 3M
  • Nike
Learn more about investing in ESG
Contact Your Relationship Manager or KGI Asia Wealth Management team to learn more about ESG investment
24-hour investment hotline: (852) 2878-5555 / Email: info@kgi.com
The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, known as the “17 Sustainable Development Goals – 17 SDG”, it provides a shared blueprint for peace and prosperity for people and the planet, now and into the future. The goals widely cover the Environmental, Social aspects such as clean water and sanitation, decent work and economic growth and climate actions.
  • Debut Green Inflation-linked bond for retail investors in 2022
  • Hong Kong Exchanges launched Board Diversity Repository and enhance ESG Academy
  • In response to the Paris Agreement, the Government announced Hong Kong’s Climate Action Plan 2030+ in 2017, setting out the decarbonization target
  • As an important financial hub, green and sustainable bonds issuance arranged in HKSAR accounts of more than one-third of the total amount in Asia in 2021***
  • The Chin Family Blog – ESG Information

European Union

  • EU Taxonomy Article 8 was effective from Jan 2022, giving classification system to identify economic activities considered sustainable – which aims to increase the transparency in the market and mitigate the greenwashing and subsequent reputation risks

United States

  • SEC proposes “Standardize Climate-Related Disclosures” which aims to provide investors with consistent and comparable information for investment decision making.

Mainland China:

  • Carbon reduction starting from high emitting industries, like thermal power and cement, aiming to reach carbon peak by 2030 and carbon neutral by 2060
  • Shanghai Environment and Energy Exchange set stage to launch the Country-wide carbon trade to allow companies trading carbon credits

 


  • At current stage, there is no uniform set of standardized methodology or ESG rating to evaluate ESG investment globally and different rating agencies may have their own rating methodologies. To assess ESG investment and understand its risk-reward nature, you need to consider both financial and non-financial factors including but not limited to the overall financial performance and the ESG factors.
  • An over-concentrated portfolio may affect the investment return. In today’s changing world, ESG related topics are intertwined with policy. For example, achieving carbon neutrality and addressing climate change have become key issues and goals for many countries around the world. Investors should consider taking a diversified risk-balanced approach to capture the sustainable growth opportunities in face of ESG investment.
Frequently Asked Questions:
What does ESG stand for?

ESG consists of three pillars – namely Environmental (E), Social (S) and Governance (G).

What’s an ESG investment?

ESG investing is considered as one of the sustainable investments, which aims to generate return in a long run, as well as risk mitigation.

Is there any standardized measurement on ESG?

Currently, there’s no uniform set of standardized measurement or criteria to evaluate ESG investment globally. Having said that, there are several scoring systems and standards from global financial corporations / rating agencies such as MSCI, Moody’s, Standards and Poor’s and Morningstars. Upon evaluation of ESG ratings of a company, investors shall take into consideration of ESG ratings from different rating providers alongside its financial performance to formulate a more objective and comprehensive investment strategy.

What are the possible approaches to choose ESG corporates?

Traditionally investors may eliminate the companies that are not complying with the ESG concepts. Nowadays, investors are adopting more approaches and aspects to assess the ESG performance of a company which would include positive screening (Select the ESG leaders in the sector), consider corporate communications and impact investing, etc.

What can we provide you with the ESG product solutions?

We provide various ESG products to align your long-term financial goals, including ESG investment funds, green bonds, sustainable bonds and structured products, etc.

How can I participate in ESG investments?

You should CLICK HERE to open brokerage account with us by providing the relevant documents including risk profiling questionnaire to help us better understand your investment objectives and appetite.

Disclaimer
All the information contained in this webpage is confidential and is not intended for use by persons or entities located in or residing in jurisdictions which restrict the distribution of this webpage by KGI Asia Limited (“KGI”), or any affiliates of KGI. Such information shall not constitute investment advice, or an offer to sell, or an invitation, solicitation or recommendation to subscribe for or invest in any securities, insurance or other investment products or services nor a distribution of information for any such purpose in any jurisdiction. In particular, the information herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States of America, or to or for the benefit of United States persons (being residents of the United States of America or partnerships or corporations organised under the laws of the United States of America or any state, territory or possession thereof). All the information contained in this webpage is for general information and reference purpose only without taking into account of any particular investor’s objectives, financial situation or needs and may not be redistributed, reproduced or published (in whole or in part) by any means or for any purpose without the prior written consent of KGI. Such information is not intended to provide any legal, financial, tax or other professional advice and should not be relied upon in that regard.

All investments involve risks. The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities.

Prices of fund units may go up as well as down and past performance information presented is not indicative of future performance. Investors should read the relevant fund’s offering documents (including the full text of the risk factors stated therein (in particular those associated with investments in emerging markets for funds investing in emerging markets)) in detail before making any investment decision.

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No representation or warranty is given, whether express or implied, on the accuracy, adequacy or completeness of information provided herein. In all cases, anyone proposing to rely on or use the information contained herein should independently verify and check the accuracy, completeness, reliability and suitability of the information. Simulations, past and projected performance may not necessarily be indicative of future results. Information including the figures stated herein may not necessarily have been independently verified, and such information should not be relied upon in making investment decisions. None of KGI, its affiliates or their respective directors, officers, employees and representatives will be liable for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind) suffered or incurred by any person or entity due to any omission, error, inaccuracy, incompleteness or otherwise, or any reliance on such information. Furthermore, none of KGI, its affiliates or their respective directors, officers, employees and representatives shall be liable for the content of information provided by or quoted from third parties.

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Derivative products may not be suitable for you as they can be complex and carry with them substantial risk of loss. You should make investment in derivative products only after carefully assessing among other things the direction, timing, and magnitude of the potential future changes in the price or level of the underlying asset or instrument or other benchmark, as the return of any such investment may be dependent upon such changes. However, risks associated with trading in derivative products are not and should not be presumed to be predictable. Investing in certain types of derivative products may result in your having to take or make delivery of certain underlying asset or instrument at a predetermined price. In such circumstances, you will need to perform such obligation however far the market price or level of the underlying asset or instrument has moved away from the pre-determined price or level and the resulting losses to you can be substantial.

Equity Linked Instruments (ELIs) are structured products which are marketed to investors who want to earn a higher interest rate than the rate on an ordinary time deposit and accept the risk of repayment in the form of the underlying shares or losing some or all of their investment. When an investor purchases an ELI, he is indirectly writing an option on the underlying shares. If the market moves as the investor expected, he earns a fixed return from his investment which is derived mainly from the premium received on writing the option. If the market moves against the investor’s view, he may lose some or all of his investment or receive shares worth less than the initial investment. Investors may lose part or all of their investment if the price of the underlying security moves against their investment view. Investors are exposed to price movements in the underlying security and the stock market, the impact of dividends and corporate actions and counterparty risks. Investors must also be prepared to accept the risk of receiving the underlying shares or a payment less than their original investment. Investors should note that any dividend payment on the underlying security may affect its price and the payback of the

ELI at expiry due to ex-dividend pricing. Investors should also note that issuers may make adjustments to the ELI due to corporate actions on the underlying security. Investors should consult their brokers on fees and charges related to the purchase and sale of ELI and payment / delivery at expiry. The potential yields disseminated by The Stock Exchange of Hong Kong Limited have not taken fees and charges into consideration. While most ELIs offer a yield that is potentially higher than the interest on fixed deposits and traditional bonds, the return on investment is limited to the potential yield of individual ELIs.

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