According to Standard Chartered Bank, the sum could be mobilised towards the financing of climate transition efforts such as tackling pollution and managing wastes.
The bank said in its just released “Sustainable Banking Report 2022: Mobilising retail investor capital” that this is part of the US$8.2 trillion (RM38.7 trillion) in investable retail wealth that could be channelled into sustainable investments by 2030 to finance ESG objectives in 10 growth markets.
The report shows that there is great potential for the growth of sustainable investing in Malaysia, largely due to its significant population and rising domestic wealth.
“Across Malaysia, 36% of investors want to put their money towards addressing climate change,” the bank said.
It said greater access and transparency in the sustainable investment ecosystem could mobilise such potential to help the country achieve carbon neutral targets apart from meeting other ESG goals such as reducing pollution, improving waste management and enhancing energy security.
However, there are market-specific barriers that need to be overcome to unlock the RM165.2 billion potential to turn investor interest into actual impact.
The report said investors in Malaysia have cited several barriers that are of concern to them. A total of 53% of them see low returns despite higher risks, 51% worry about accessibility and 45% of them don’t see sufficient comparability.
“These findings demonstrate how financial institutions can play a critical role in unlocking available capital by breaking down these barriers for retail investors using analyses that are based on their behaviour and motivations,” the report said.
It said action should be taken to democratise access to sustainable investments by making more solutions available in more markets via digital platforms, providing clear and transparent information, addressing investors’ concerns and providing data-led advice on how to match their ESG priorities with the right solutions.
Standard Chartered Malaysia managing director Sammeer Sharma said research had shown that 72% of affluent individuals and 86% of high-net-worth individuals in Malaysia have a high level of interest in sustainable investments, motivated by their desire to help restore the environment and hedge against ESG risks.