An Impact Investment survey by Lombard Odier of next generation High Net Worth Individuals (HNWIs) and Ultra High Net Worth Individuals (UHNWIs) in Asia found that almost all (98%) of those who participated were looking to increase their allocations to Impact Investments, with 3% of these seeking to make 100% of their portfolio impact-driven.  

Impact Investing continues to take root in the region as HNWIs and UHNWIs look to have a positive impact on the world around them amid fast-moving and challenging global circumstances.  

The survey, which polled more than 110 next generation HNWI and UHNWI clients of partner banks associated with Lombard Odier from Asian markets, found that improved availability of good Impact Investing solutions with demonstrated performance was a major factor behind this shift (68%), alongside rising concerns about social and environmental challenges (52%). 

Vincent Magnenat, Chief Executive Officer, Asia Pacific at Lombard Odier, commented, “We have seen a shift in client interest driven in part by the next generation.  During our most recent Next Generation Forum with young family business members from Asia, Impact Investing emerged as one of the most notable themes, with participants showing great willingness to gear their portfolios for impact for wide-ranging reasons largely driven by social-conscience.”

These results point to a continuation of a trend identified last year in a Lombard Odier survey of High Net Worth Individuals (HNWIs) in Asia which found that almost every respondent (99.1%) agreed that social responsibility had become important in a post-COP21 world¹ and, moreover, most (97.2%) were willing to increase their allocations to Impact Investing. 

Despite the increase in willingness among the next generation HNWIs and UHNWIs to invest with impact, more than half (56%) of those surveyed were yet to make a single impact investment, and a further quarter (26%) of those surveyed were unfamiliar with the basics of Impact Investing.

Vincent Magnenat added: “While we continue to see increasing awareness around Impact Investing in the region, the market remains relatively underdeveloped compared with some parts of the world.  Even among a next generation audience we continue to see HNWIs and UHNWIs in Asia take a cautious approach to increasing allocations to Impact Investing strategies.  However, we do not believe it will take long for the gap to narrow in Asia with improving availability of investment instruments driving this change.”

In this context a preferred asset class for impact investment is yet to clearly emerge, with next generation respondents citing venture capital (23%), tangible assets (21%), listed equities (14%) and bonds (13%) as ways they would be interested to add impact investment into their portfolios.

Ranked among the world’s best asset managers by the UN PRI (A+), Lombard Odier was one of the pioneering institutions to practice Socially Responsible Investing (SRI) and has been developing Environmental, Social and Governance (ESG) analysis since as early as 1997.

“Lombard Odier is committed to bringing its 20 years of responsible investing expertise and an even longer tradition of social commitment into Asia. Looking forward, as we seek to help our clients take action, we will continue to offer solutions which help clients turn good intentions into impactful investment while at the same time managing their wealth and generating returns,” said Vincent Magnenat.

¹ COP21, also known as the 2015 Paris Climate Conference