Kempen Blacklists Singapore Assets as ESG Screen Hits Rich World

On June 8, 2023, Van Lanschot Kempen NV, a Dutch asset manager, blacklisted state-backed assets from Singapore after the country failed an updated ESG test. Singapore, known as Asia’s wealthiest country per capita, has been placed on an ESG blacklist due to its poor performance in the updated ESG test. The move by Van Lanschot Kempen NV highlights the increasing importance of ESG (Environmental, Social, and Governance) factors in investment decisions.

According to Bloomberg, the updated ESG test used by Van Lanschot Kempen NV is part of a growing trend among asset managers to incorporate ESG factors into their investment decisions. The move towards ESG investing has been driven by a growing awareness of the impact that companies have on the environment and society, as well as the potential financial risks associated with poor ESG performance.

The blacklisting of Singapore assets by Van Lanschot Kempen NV is likely to have significant implications for the country’s economy, as it could lead to a reduction in investment from international asset managers. The move also highlights the need for companies and governments to take ESG factors seriously and to work towards improving their ESG performance.

The Asia-Pacific region is also placing more emphasis on greenwashing risks. New guidelines rolled out by the Monetary Authority of Singapore (MAS), which will take effect in January 2023, aim to reduce the risk of greenwashing by requiring financial institutions to disclose their ESG policies and practices. The guidelines also require financial institutions to provide clear and accurate information on the ESG characteristics of their products and services.

The blacklisting of Singapore assets by Van Lanschot Kempen NV is a clear indication that ESG factors are becoming increasingly important in investment decisions. As more asset managers incorporate ESG factors into their investment decisions, companies and governments will need to take ESG factors seriously and work towards improving their ESG performance to attract investment.