American International Group and J.P. Morgan Chase have taken advantage of worsening air pollution in Hong Kong to start what they say will be the territory's first "green" pension fund.
"Awareness of environmental issues will have some impact on where people want their money to be invested and in what types of companies," Peter Crewe, Asia regional director of pensions at AIG Global Pensions, said.
The fund, called the Green Fund, will be managed by Crédit Agricole Asset Management and will invest in companies with good financial performance that protect and help sustain the environment. Crewe declined to name the companies for the fund or say how much the fund has raised since it started on March 31. He did say that the fund "has exceeded our target." AIG's funds in Hong Kong typically raise about $10 million.
Hong Kong's government faces rising criticism over air quality because of emissions from power plants and factories inside its territory and across the border in mainland China. Hong Kong has been a semiautonomous region of China since Britain handed over sovereignty in 1997.
Investment in socially responsible funds is gaining popularity as people search for ways to put money in companies that are not polluting or involved in alcohol, tobacco, nuclear power, weapons or gambling.
Socially responsible investment assets under management reached $3 trillion worldwide, with $2.5 billion in Asia, according to the Association for Sustainable & Responsible Investment in Asia, based in Hong Kong.
The best-performing green fund in the world is the Merrill Lynch New Energy Technology Fund, which invests globally in companies that focus on alternative energy or energy technology, like Vestas Wind Systems, the biggest windmill maker in the world, and Solarworld, a German solar-cell maker.
The fund rose 100 percent in the past year, outperforming the 17 percent gain in Morgan Stanley Capital International's world index, which includes 1,790 stocks in emerging markets and developed markets. The index has risen 5.4 percent this year.
Gazinvest Fund, the top-performing fund, has risen 586 percent in the past year on investments in the oil and gas industry. Gazinvest is managed by GEM Global Equities Management.
"It is about returns, returns, returns," Liu Yang, a fund manager at Atlantis Investment Management in Hong Kong, said. Investors worried about social issues may not put returns at the top of their priorities, "but capitalists have hardened their hearts and only consider returns. It's very hard to reconcile both."
Hong Kong's pollution index was at more than 100, with readings of either "very high" or "severe," for 49 days in 2005 and 87 days in 2004, according to government figures. At that level, the government advises people with asthma or cardiovascular disease to stay indoors. Between January and May 10 this year, 13 days have rated 100 or above. A rating of 101 is considered unhealthy for sensitive groups.
"Hong Kong investors are particularly well positioned right now to think about the link between air pollution and environmental policies and the competitiveness of companies and their eventual share performance," said Melissa Brown of the Association for Sustainable & Responsible Investment in Asia.
A survey by the association and Hong Kong University found that 61 percent of residents indicated they would be interested in investing in such funds. $@
American International Group and J.P. Morgan Chase have taken advantage of worsening air pollution in Hong Kong to start what they say will be the territory's first "green" pension fund.
"Awareness of environmental issues will have some impact on where people want their money to be invested and in what types of companies," Peter Crewe, Asia regional director of pensions at AIG Global Pensions, said.
The fund, called the Green Fund, will be managed by Crédit Agricole Asset Management and will invest in companies with good financial performance that protect and help sustain the environment. Crewe declined to name the companies for the fund or say how much the fund has raised since it started on March 31. He did say that the fund "has exceeded our target." AIG's funds in Hong Kong typically raise about $10 million.
Hong Kong's government faces rising criticism over air quality because of emissions from power plants and factories inside its territory and across the border in mainland China. Hong Kong has been a semiautonomous region of China since Britain handed over sovereignty in 1997.
Investment in socially responsible funds is gaining popularity as people search for ways to put money in companies that are not polluting or involved in alcohol, tobacco, nuclear power, weapons or gambling.
Socially responsible investment assets under management reached $3 trillion worldwide, with $2.5 billion in Asia, according to the Association for Sustainable & Responsible Investment in Asia, based in Hong Kong.
The best-performing green fund in the world is the Merrill Lynch New Energy Technology Fund, which invests globally in companies that focus on alternative energy or energy technology, like Vestas Wind Systems, the biggest windmill maker in the world, and Solarworld, a German solar-cell maker.
The fund rose 100 percent in the past year, outperforming the 17 percent gain in Morgan Stanley Capital International's world index, which includes 1,790 stocks in emerging markets and developed markets. The index has risen 5.4 percent this year.
Gazinvest Fund, the top-performing fund, has risen 586 percent in the past year on investments in the oil and gas industry. Gazinvest is managed by GEM Global Equities Management.
"It is about returns, returns, returns," Liu Yang, a fund manager at Atlantis Investment Management in Hong Kong, said. Investors worried about social issues may not put returns at the top of their priorities, "but capitalists have hardened their hearts and only consider returns. It's very hard to reconcile both."
Hong Kong's pollution index was at more than 100, with readings of either "very high" or "severe," for 49 days in 2005 and 87 days in 2004, according to government figures. At that level, the government advises people with asthma or cardiovascular disease to stay indoors. Between January and May 10 this year, 13 days have rated 100 or above. A rating of 101 is considered unhealthy for sensitive groups.
"Hong Kong investors are particularly well positioned right now to think about the link between air pollution and environmental policies and the competitiveness of companies and their eventual share performance," said Melissa Brown of the Association for Sustainable & Responsible Investment in Asia.
A survey by the association and Hong Kong University found that 61 percent of residents indicated they would be interested in investing in such funds.
Source: http://www.iht.com/articles/2006/05/22/bloomberg/sxasia.php
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