World Wide Fund for Nature Singapore Introduces Sustainable Private Banking & Wealth Management Framework & Conducted Pilot Study with 7 Private Banks, 4 of 7 Private Banks Check Portfolios for ESG Events
10th June 2023 | Hong Kong
The World Wide Fund for Nature Singapore (WWE-Singapore) has introduced a Sustainable Private Banking & Wealth Management Framework and conducted a pilot study with 7 private banks in Singapore, with 4 of the 7 Private Banks indicated they check portfolios for ESG events (Environmental, Social & Governance risk events, including deforestation and violations of human rights). 3 of the 7 private banks have set science-based targets for decarbonisation, 5 of 7 private banks use forward-looking ESG risk analysis methods, 2 of 7 private banks include ESG as a factor in KYC & onboarding client, 1 of 7 vote on behalf for clients, and none of the 7 private banks have active shareholder (Investee) engagement. See below for WWE-Singapore Sustainable Private Banking & Wealth Management Framework. View Pilot Study here
” World Wide Fund for Nature Singapore Introduces Sustainable Private Banking & Wealth Management Framework & Conducted Pilot Study with 7 Private Banks, 4 of 7 Private Banks Check Portfolios for ESG Events “
R. Raghunathan, WWF-Singapore CEO: “Finance is a lever for change that can help deliver an equitable, net-zero, nature-positive future. Private banks manage considerable financial resources for their clients and therefore, are in a unique position to advise on sustainable products and services.”
Kristina Anguelova, WWF-Singapore Head of Asia Sustainable Finance: “In our pilot study, we have identified opportunities for private banks to proactively address ESG risks and further integrate sustainability into their operations. With growing wealth in Asia, private banks can engage multi-generational wealth owners to create impact with their assets, social capital and philanthropy.”
Sustainable Private Banking & Wealth Management (SPRING) framework
Six-pillar framework
The SPRING framework is built on six fundamental pillars (Appendix 1) that emphasise the importance of sustainability in achieving long-term portfolio growth. These pillars underline the role of private banks in supporting their clients to allocate resources to finance sustainable development, connecting to the real economy, and protecting natural capital. Along with the framework’s 48 sub-indicators, it measures the robustness of ESG integration in the private banking sector and encompasses the private banks’ policies, practices, client-related activities, processes, and policies and commitments. It evaluates various areas of the private banks’ business, including investments (discretionary portfolio management – DPM – investment advisory, and execution), wealth planning, and philanthropy.
Following the development of the framework, WWF-Singapore conducted a pilot study from October 2022 to February 2023 with seven private banks that have presence in Singapore and headquarters in the US (1), Europe (2) and Asia (4). The pilot was based on the SPRING framework structure to assess environmental, social, and governance (ESG) integration efforts
Key Observations From WWF-Singapore’s Pilot Study
- Currently, private banks are making commitments to integrate sustainability, however there is a need to tailor and integrate these specifically to the reality of private banking, including measurable targets and increased focus on climate and nature-related risks.
- There is a need for stronger risk management among private banks. There are some green shoots with private banks undertaking ESG risk assessments and scenario analysis, using multiple data sources for due diligence at the group level, but it needs to be an integral part of the private banks’ processes. More so, there is a need for private banks to better incorporate banking best practices such as ESG risk assessments and scenario analysis as part of their own processes
- Majority of private banks have group-level oversight committees. There is limited progress on the appointment of dedicated sustainability officers and in the incorporation of sustainability considerations into board audit and nomination processes.
- ESG considerations also provide an opportunity for banks to understand their clients’ risk profiles and investment preferences and is an area where private banks can progress. Banks that do not factor ESG considerations in their assessment are more vulnerable to reputational and regulatory risks.
- Banks have the potential to make a meaningful impact in advancing sustainability efforts by assisting clients with ESG-focused strategies, exercising delegated voting and engagement rights, as well as advocating for improved business practices within invested companies.
Looking ahead, WWF-Singapore aims to continue to partner with banks, investors, regulators, and stock exchanges in Asia to integrate ESG into mainstream finance and build more resilient and sustainable financial systems.
About WWF-Singapore
World Wide Fund for Nature (WWF) is one of the world’s largest and most respected independent conservation organisations. WWF’s mission is to stop the degradation of the earth’s natural environment and to build a future in which humans live in harmony with nature. WWF-Singapore works locally and around the region to create impactful change around climate, circular economy, wildlife, biodiversity and sustainable finance by engaging individuals, communities, businesses and governments. Our mission is to stop the degradation of the planet’s natural environment and to build a future in which people live in harmony with nature. For more information, please visit wwf.sg.
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