How to diversify and invest sustainably with Singapore's first low-carbon ETF
The Lion-OCBC Securities Singapore Low Carbon ETF provides an opportunity to investors to build green portfolios for returns that also benefit the environment
Climate change, the defining crisis of the twenty-first century, is humanity’s biggest long-term threat, and the global transition to a low carbon economy is now more urgent than ever. Apart from adopting climate-friendly habits on a personal level, individuals should also ensure that they are investing their money in a way that benefits the planet.
Doing your part to make a positive impact on the world
As the climate crisis intensifies, there has never been a greater urgency to invest in companies moving towards low carbon emissions.
Southeast Asia is one of the regions that is particularly vulnerable to climate change, and ASEAN could see GDP growth reduced by 7.5 per cent annually until 2070 due to disruptive forces like natural disasters. Singapore, too, is susceptible to the impact of climate change such as rising sea levels, heat waves, increasing rainfall intensities and risks losing up to 46 per cent of its GDP in a worst-case scenario.
At present, the world is clearly not doing enough to combat or mitigate climate change. As governments, including Singapore’s, review their climate targets, individuals and businesses need to do whatever they can to reduce carbon emissions and slow global warming.
The average Singaporean is highly aware of environmental issues, according to the inaugural OCBC Climate Index released in 2021. It scored a national average of 6.7 points. The index is a measurement of the levels of environmental sustainability awareness and climate action among the 2,000 Singaporeans aged between 18 and 65 surveyed. For those who are wondering how to live more sustainably, the answer is that improvements can be made in almost every area of daily lives, from diets and holiday choices to investment decisions. Investors can examine their habits and actions to see where they can make more sustainable choices.
Investing in sustainable companies offers investors the opportunity to support climate-friendly business practices and participate in the transition to a low-carbon economy.
More specifically, Environmental, Social and Governance (ESG) investing enables investors to ensure that their money goes towards companies that have been assessed in terms of their performance as a steward of the environment, as well as how they manage relationships with employees, suppliers, customers, and the communities where it operates. The governance aspect deals with the company’s leadership, executive pay, audits, internal controls, and shareholder rights.
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