JAKARTA, RAKYAT NEWS – Sustainable investments based on Environmental, Social, and Governance (ESG) criteria have been showing positive growth trends over the past three years, with an increasing number of ESG-based investment products and a rise in managed assets.

During a press conference held at the Indonesia Stock Exchange on Friday, November 22, Liew Kong Qian, Head of Investment at Eastspring Investment Indonesia, noted that investors are increasingly aware that their portfolios should not only focus on profit but also on the impact companies have on society and the environment. He stated, “With this awareness, the trend of ESG investments is on the rise.”

According to data from the Financial Services Authority (OJK), ESG-based investments in Indonesia have experienced significant growth in 2024 compared to 2022. As of June 2024, assets under management (AUM) for ESG investments reached IDR 8.2 trillion, while the number of ESG mutual fund products had grown to 34.

However, despite the positive growth, a survey by Morningstar titled “Voice of the Asset Owner Survey 2024 Quantitative Analysis” revealed that not all investors have fully embraced ESG principles. The survey found that 40% of investors do not believe ESG analysis is useful. Furthermore, only 40% of investors agree that ESG integration reduces risks and portfolio volatility, and just 45% believe it can improve long-term investment returns.

Qian emphasized, “This indicates that many investors still need to be convinced of the benefits of the ESG trend moving forward.”

The growing awareness of ESG’s potential is expected to drive further growth in sustainable investments, with an increasing number of financial products incorporating ESG criteria to meet the demand of socially conscious investors.(Uki Ruknuddin)

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