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Countries with a legacy of wealth, such as Singapore and Hong Kong, saw family foundations take a more prominent role in strategic philanthropy, according to The Social Investment Landscape in Asia by the Asian Venture Philanthropy Network (AVPN).
The report by the Singapore based funders’ network said while corporate social responsibility (CSR) was common in all 14 Asian regions researched, the integration of socially responsible practices within business, or shared value approaches, was less common. Multinationals were mainly driving CSR best practices in less mature economies but increasingly provincial firms were seeing adoption.
“Growth of responsible investment incorporating Environmental, Social and Governance (ESG) factors is a strong mainstream market force for impact,” the report said, which was launched to about 600 attendees at the AVPN Conference in Bangkok on 7-9 June.
“The tradition of giving is deeply-seeded in Asia but we feel there is opportunity to give better – more strategically and in more collaborative ways,” Naina Subberwal Batra, AVPN chief executive, said.
“We feel that this report provides much needed guidance to help channel the generosity of Asian philanthropists into areas with the greatest need and also to identify key players they should be working with.”
The report outlined societal needs across 14 Asian countries and how they deal with those needs. It was intended to guide social investors in maximising their impact whether they are philanthropists, impact investors, or corporations engaged in corporate social responsibility (CSR).
Emerging economies (including India, Cambodia, Myanmar, Indonesia, Philippines and Vietnam) struggled with healthcare and education while developed economies (such as Japan, South Korea, Taiwan and Hong Kong) needed to focus on aging societies and inequality. The entire Asian region needed to address environmental issues, from energy access and infrastructure in emerging economies, to climate risk mitigation and natural resources management in the island countries of Asia.
The report went on to declare Asia was in the middle of a “historic transformation” It quoted the Asian Development Bank (ADB) which estimated that if Asia continued to follow its trajectory, by 2050 its per capita income could rise six-fold in purchasing power parity to reach European levels today. It would make about three billion extra Asians affluent by today’s standards.
However, highly engaged social investors were needed for the Asian social economy to flourish. International investors, development agencies and regional investors were actively supporting the development of social enterprises (SEs) in Asia.
“Most of the 14 social economies are experiencing early-to-mid stages of SE growth but viable pipelines for impact investment are small and deal volumes are low,” the report said.
“There is a growing trend in more localised funds which work with those closer to the root of the problem to create social impact.
Kevin Teo, AVPN knowledge centre managing director, said governments played one of the largest and widest-reaching roles in the social economy.
“Markets like South Korea, Hong Kong, Singapore, Taiwan and the Philippines have been the most progressive in this area to date,” Teo said.
Government policies such as CSR mandates, dedicated offices for promoting social entrepreneurship, seed funds and capacity building were among the examples of government support given in the Landscape report.
The role of intermediaries was evident throughout the report with reference to the importance of building capacity of non-governmental organisation and SEs, promoting cross-sector collaborations and forging partnerships.