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Asian SRI scene shows signs of marked growth

February 2003

Socially responsible investment is finally beginning to take hold in the Far East, according to the Association for Sustainable and Responsible Investment in Asia.

Asria says its membership has virtually doubled to 79 in the last 12 months, with a ‘significant’ number of Asia-based firms joining the association in 2002.

Most of the 41 founding members are European or US-based firms with Asian divisions, but Louise Mitchell, Asria’s executive director, said: ‘There is definitely an SRI community building in Asia and our membership figures are testament to that. It is encouraging that many of our newer members are local Asian companies.’

Mitchell added that Asria’s regional meetings now had an average of 50 delegates, compared with only ten a few months ago. Asria’s last annual conference had 300 delegates ­ twice as many as in 2001, when the event first took place.

However, Mitchell said there were areas of weakness, particularly Japan, where SRI appeared to be losing ground. ‘Performance of SRI funds in Japan has been very weak and that has impacted on the development of new funds,’ she said.

Yusuke Matsuo, a researcher at Lund University in Sweden and an expert on SRI in Japan, said the market had stagnated after the initial surge of interest following the launch of the first SRI fund by Nikko Asset Management in 1999.

‘All nine SRI funds have underperformed the general market, so the initial boom has ended,’ he said. ‘Support has mainly been from retail customers, so we need the participation of institutional investors in this area.

‘There also needs to be an improvement in the transparency of the screening processes and the criteria used by the funds, as these are not very sophisticated.’

Matsuo added there were some signs that the Japanese government may encourage the development of the SRI market.

Total asset value of Japanese SRI funds stood at an estimated 90billion yen ($760million, £470m) in September 2002, he said, with Nikko accounting for around 58 per cent of the market in asset terms.




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