Abrdn Goes Green

Global manager launches sustainable ETF

On Wednesday it was announced that Abrdn, a UK-based, FTSE 250 constituent, global management firm, is launching its series of sustainable exchange-traded-funds, the first of which being the Sustainable Asian Opportunities Active ETF (ticker: ASAO).


The ASAO was first brought to market by Abrdn Australia as the ‘first cab off the rank’ and highlights the growing needs and wants for ESG-focused investing. The fund seeks to achieve high growth over the medium to long term and invests in around 35 -70 quality listed firms in Asia. [1] An article from InvestorDaily reports that the ETF is part of a much larger strategy to increase access to its products and solutions ‘across asset classes, regions, and markets’. [2] The global manager has thirty years of experience in Asia Pacific markets and says that the region will account for more than half of the world’s economic growth by next year. [3]


An article on the fund manager’s website ESG-focused and sustainable practices have become more important to both institutional and independent investors, and as this continues, investing sustainably will not just be morally sound but financially attractive too. [4] Abrdn has responded to this growing interest by developing its ESG House Scores, designed to measure and expose the way companies manage their ESG risks. [5]


Abrdn’s recent history is not a pleasant read. Financial woes, a pricey acquisition and a sector-wide downturn have led the firm to be relegated from the FTSE 100.[6] By focusing on its core competencies in Asia Pacific investments and ESG strategy, Abrdn is perhaps trying to adjust to the difficult year it has just experienced. Or maybe the global manager has decided to listen to the cries for green solutions. The demand is there for greener and cleaner products, so much so that it is currently outstripping supply according to an article in the Financial Times.[7]


Regardless of the motives, global markets are clearly showing a shift towards more ethical choices, and the race to satisfy that shift is surely about to begin. An attractive feature of this move towards ESG-centred investing is something industry insiders call ‘double materiality’, with a company’s ethical actions becoming profitable and moral.[8] This idea is not a stranger in the world of business academics either. In 1994, author and entrepreneur John Elkington theorised the ‘triple bottom line’ focusing on people, profits and the planet.[9]Academia has seen calls for companies to focus more on non-financial measures of success and impact, and it is only recently that annual reports have begun to feature ESG metrics and performance reviews.



As entire industries, sectors and economies transform into green powerhouses, we can expect green solutions such as Abrdn’s ETF to become handsome investment decisions in the near future, with everyone from pension funds to individual investors buying into this cleaner future.


And that is exactly what needs to happen. To have any hope of such a future we need entire economies to be fully committed to green developments and technological solutions. But, for now, its managers like Abrdn leading the way.

 

Edited and Reviewed by Tanish Bagga.

 

References/ Further Reading:

[1] https://www.financialstandard.com.au/news/abrdn-launches-activesustainable-asian-etf-179797149

[2] https://www.investordaily.com.au/news/52248-sustainable-active-etf-serieslaunched-by-abrdn

[3] https://www.abrdn.com/en-gb/intermediary/insights-thinking-aloud/articlepage/asian-equity-sustainable-esg

[4] https://www.msn.com/en-us/money/other/are-sustainable-etfs-a-short-cutfor-socially-responsible-investors/ar-AA137zQ6

[5] https://www.abrdn.com/en-au/investor/sustainable-investing/sustainableinvesting-solutions#explore

[6] https://www.ft.com/content/476bf108-3743-4da8-8622-5760fd2c1538

[7] https://www.ft.com/content/5763c866-3437-4b66-8467-09486454a162

[8] https://www.ftadviser.com/investments/2022/10/19/what-opportunities-areopening-up-for-esg/

[9] https://sustain.wisconsin.edu/sustainability/triple-bottom-line/ Image https://unsplash.com/photos/WYGhTLym344

118 views0 comments

Recent Posts

See All