BNP Paribas Asset Management: ESG is Key in Future Sustainability and Indonesia's Economic Recovery

JAKARTADAILY.ID – President Director of PT BNP Paribas Asset Management, Priyo Santoso said that investing using an environment, social, governance (ESG) filter is the right approach at this time to realize the increasingly important role of investment in future sustainability and also for the nation's economy.

According to him, PT BNP Paribas AM realizes that social and environmental issues play a very important role now and in the future. Therefore, everyone has a role to play in protecting the environment and the earth in various ways because we are the ones who are The Future Makers.

“We as investment managers also apply it through investment. For this reason, the company continues to innovate through solutions that focus on sustainable investment to suit the needs of the community, especially young people," said Priyo in a press release, Monday, June 14, 2022.

Priyo explained that PT BNP Paribas AM offers sustainable investment solutions through product themes and investment strategies that focus on long-term, structured investment processes that emphasize good governance formulated in mutual fund products that specifically carry the ESG and SRI themes.

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The demand for ESG-based investment in Indonesia itself is starting to show an upward trend. As of December 2021, ESG-based mutual fund managed funds at PT BNP Paribas AM reached Rp 5.2 trillion, a significant increase compared to 2019 which was only around Rp 1 trillion.

Growth has also occurred on the product side of the mutual fund industry in Indonesia, where in 2021 there will be 15 ESG-based mutual fund products of which PT BNP Paribas AM contributed 3 products, namely the BNP Paribas SRI-KEHATI Index Mutual Fund, BNP Paribas Sharia Mutual Fund Cakra Syariah USD and Sharia Mutual Fund BNP Paribas Greater China Equity Syariah USD.

“We strive to provide added value for young investors to be able to invest while contributing positively to the environment and society. We do this, for example, by adding a social fund feature to our mutual funds to be channeled to the development of social programs, so that the impact can be felt more directly for the economic and social development of the community in the targeted areas of the program," he said.

"Young investors can also find out the progress of the funds they have in helping empowerment in the area transparently through public media," he added.

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Data from the Morgan Stanley Institute for Sustainable Investing states that the millennial generation in the world is more interested in sustainable investment or better known as ESG.

One of the reasons that attract investors, especially the younger generation, to sustainable investment in the hope that companies and business activities can manage natural resources in an environmentally friendly manner and pay attention to the welfare of human resources.

Based on KSEI data as of April 2022, the number of mutual fund investors in Indonesia has reached 7.9 million. Furthermore, about 60 percent of investors in Indonesia are under the age of 30, this shows that young people in Indonesia are now starting to understand the importance of investing.

It is now easier for young investors to choose investment instruments based on the sustainable concept because this concept has become available in the market. Beginner investors can also start investing through mutual funds based on Environment, Social, and ESG Governance.