But with enforcement action for failing to conform with anti-greenwashing rules expected to grow, experts highlight that the potential costs and reputational risks of non-compliance are rising too.
Xuan Sheng Ou Yong, Singapore-based green bonds and environmental social and governance (ESG) analyst at BNP Paribas Asset Management, said compliance and operational costs have continued to increase as regulators in different markets make adjustments to ESG investing and disclosure frameworks.
“I don’t think we are close to a plateau — asset managers and investors will continue to spend more,” he said.
Greater resources are needed not just to pay for developing in-house strategies and to communicate these to investors, he noted, but also to comply with different European and Asian regulatory requirements.
“I wouldn’t expect anyone to reduce their investments in this space in the coming years,” Ou Yong added.
The Monetary Authority of Singapore introduced its first-ever guidance for disclosure and reporting for retail ESG funds last July, shortly after announcing plans to conduct climate-related stress tests on fund firms.
The MAS-backed Green Finance Industry Taskforce also rolled out a second green and transition taxonomy consultation last May, including guidelines for asset managers on how to apply the framework. This followed the release in February of green skillset guidelines, which aim to encourage firms to design new training programmes.
Source : ft.com