Asia Funds ESG Report 2022 — Navigating the ESG Maze

In the third quarter of 2022, Morrison Foerster and AVCJ surveyed 100 Asia-headquartered Fund General Partners (GPs) with USD 1 billion+ AUM to gain their insights on how environmental, social, and governance (ESG) considerations are impacting their investments and the market. The survey results give fund managers an opportunity to benchmark themselves against peers and provide practical action points for funds to navigate the ESG maze. Read our 2022 report or view our 2022 key findings infographic.

In summary, the results show that:

• ESG is increasingly a consideration in operations and investment decisions— but for the majority of GPs much of it remains superficial at best.
• GPs see the benefits of improved ESG practices for reputation and investment opportunities—but is it all talk and not enough action?
• Diversity, equity and inclusion (DE&I) is rising up the agenda—but relatively few investors are taking decisive action.
• ESG compliance is not yet an essential part of diligence and deal documentation— the industry needs to catch up.

• Asia GPs are generally behind other areas of the world on ESG adoption and practice and must move quickly or find themselves lagging significantly behind peers.
• There is regulatory pull to adhere to the latest requirements, but limited partners, shareholders, investors, customers, and employees are also asserting their influence more and more.

Pathway Podcast Series

We have identified seven practical ESG pathways to help fund managers along their ESG journey and have recorded short podcasts introducing each topic. Please click on the links below to listen to each podcast:

• ESG Investments and the Growth of GP Accountability to Their LPs
• Converting DE&I Opportunities and Challenges into Action
• Incentives and ESG Performance: Linking Investment Professional Compensation with ESG KPIs
• Supply Chains and a Growing Focus on ESG Due Diligence
• Fractured Disclosure and Greenwashing Risks
• Climate and Corporate Responsibility: Better Late Than Never!

2022 ESG and Asia Fund Managers

In the course of our research for the Asia Funds ESG survey 2022, we interviewed a number of Asia fund managers that are leading the field in ESG to explore their approach and their views on the current and future status of ESG-led investing. Click on the links below to read more.

• “The challenge is to look at ESG not only in terms of risk but also as driver of value creation”, Kyung-Ah Park, Managing Director of ESG Investment Management, Temasek
• “Greenwashing is going to climb the agenda in Asia”, Tang Zongzhong, Manager, Sustainability & ESG Strategy, Baring Private Equity Asia
• “We have a due diligence questionnaire that we’ve developed that relates to ESG”, Lan Kang, Managing Director and Head of Portfolio Management, and Lisa Chaves, Managing Director and Head of Investor Relations in the Americas, CBC Group
• “Our primary focus is on robust ESG integration”, Ivo Philipps, Chief Operating Officer, and Maruping Mangwedi, Executive Director, Affirma Capital
• “Three years ago, you could get away with telling stories . . . but LPs rightly want more”, Lincoln Pan, Co-head of Private Equity, and Jonathan Tong, Vice President, PAG
• “We’re waving a flag for women when it comes to our portfolio companies”, Haide Lui, Head of Investor Relations, Ascendent Capital
• “Today, across many different industries, it pays to be more conscientious”, Donald Tang, Celedon Partners