The dirty secret of environmental, social and governance factors in Asia is that few banks really care about it.
Most banks pay lip service to the market. All of them will change their behaviour if their clients do so first. But few will put the work in to convince their clients to start thinking more deeply about ESG.
Kasikornbank is a notable exception. The bank has put sustainability at the heart of its strategy for 2020, combining a sense of obligation and a recognition of opportunities in the market.
The strategy applies across the wider bank, but it is the private banking side that can perhaps drive the most crucial change.
The bank has spent the last few years pushing the concept of ‘perfect wealth’ to its clients. The emphasis is on combining wealth with a sense of happiness, achieved through charitable works and investments in sustainable businesses.
That reflects the advice its gives to its clients. The shock of the Covid-19 pandemic has led to a flurry of calls between worried clients and their private bankers across Asia, and indeed across the world: where should they put their money when the chaos of Covid subsides? Kasikornbank’s relationship managers have a clear answer: the future is in impact investing.
In 2019, the bank launched its first impact fund, K-Change.
The bank has partnered with Switzerland’s Lombard Odier to improve its product offering, allowing it to offer its clients a full range of global investment opportunities. That immediately unlocks the European green bond market, still the biggest market for sustainability focused investors in the world.
This focus is all the more important because of the bank’s size. It has assets under management of about $20 billion, roughly 70% of which is held in investments. That is a big change from seven years ago, when roughly 70% of its assets where held as deposits.
By convincing its clients to take more active investments – and ensuring many of those investments have a positive social or environment impact – Kasikorn has positioned itself as Thailand’s go-to private bank for ESG.
That will be especially important as wealth is transferred to members of the next generation, who increasingly see doing good and doing well as a non-binary choice.