26th November 2024
$15.6 trillion global investment in 2024 doubles the amount going into fossil fuels
Key points are as follows:
- Climate change is a key ESG issue. Highlighted at the recently concluded United Nations Climate Change Conference, more commonly known as COP29, global clean energy investment was expected to exceed US$2 trillion (HK$15.6 trillion) for the first time in 2024, and as significantly, double the amount going into oil, gas and coal.
- The MPF system has seen sustainable investing funds attract HK$1.275bn in net inflows year-to-date through 5 authorised ESG constituent funds however only one fund, Sun Life’s MPF Global Low Carbon Index Fund, manages against explicit sustainable investing measurables1 and specifically focuses on climate change as a key ESG investment theme.
- Remarkably, Sun Life’s fund has recorded a 330% surge in assets in the past year while attracting 98% of MPF ESG funds’ year-to-date total net inflows in the first 10 months of 2024.
- Given the exponential global growth in clean energy spending and the attractive ESG investment characteristics, leading MPF commentator believes sustainable investing is here to stay.
- MPF’s total asset size are currently HK$1.287tr while the average member account balance for the system’s 4.75m members is currently HK$270,700.
Francis Chung (叢川普), Chairman of MPF Ratings Ltd, Hong Kong’s independent provider of MPF research, views and education today reinforced his view that MPF’s sustainable investors will be rewarded in the long term as the United Nations Climate Change Conference, more commonly known as COP29, ended with announcements that developed nations had agreed a US$300 billion (HK$2.34 trillion) funding plan to help poorer nations cope with impacts of climate change, and in 2024 total clean energy technology and infrastructure spend globally will reach US$2 trillion (HK$15.6 trillion) – double the amount going into fossil fuels.
According to Mr Chung, the MPF system has seen ESG fund assets grow from HK$3.554bn in November 2021 to HK$17.329bn today, a 388% growth. 2024 alone has seen a net inflow of HK$1.275bn into sustainable investing, with one clear fund winning the major share of assets, Sun Life MPF Global Low Carbon Index Fund.
Quotes:
Clean energy technology and infrastructure spending is now double what is going into fossil fuels. Such spending will drive ESG returns and benefit MPF members who invest sustainably
“COP29 has ended with announcements that developed nations agreeing to a US$300 billion (HK$2.34 trillion) plan to help poorer nations cope with climate change impacts and that clean energy technology and infrastructure spend globally will reach US$2 trillion (HK$15.6 trillion), double the amount going into fossil fuels. These vast sums will drive ESG returns and benefit MPF members who invest sustainably.”
MPF has seen a surge in sustainable investing with one fund a clear winner
“The MPF system is playing its role in Sustainable investing. Over the last three years, MPF has seen a 388% growth in assets with HK$17.33bn currently invested. Notably, one fund has been a clear winner. Sun Life MPF Global Low Carbon Index Fund has attracted 98% of MPF’s sustainable investing net inflows so far in 2024.”
Why has the Sun Life MPF Global Low Carbon Index Fund been so dominant and will it continue?
“Of the 5 authorized ESG constituent funds available within the MPF system, the Sun Life MPF Global Low Carbon Index Fund is the only one that is globally managed and invests against explicit sustainable investing measurables. Such rigour has seen the fund returned 12.57% this year to outperform the MPFR All Performance Index of 9.56% by over 30%. This return is not a one off. Sustainable investing historically produced consistent returns.”
1 The Sun Life MPF Global Low Carbon Index Fund invests against an index which explicitly targets 50% reductions in carbon emissions and fossil fuel reserve intensities and 20% uplift in ESG ratings, while excluding companies in sensitive business areas
