Last week, UK-headquartered bank, Barclays, announced the appointment of Marie Freier as global co-head of Sustainable and Impact Investment Banking, alongside New-York based Brian Reilly.
Effective immediately, Freier transitions to the role from her most recent post in London leading cross asset ESG research at the bank. Her new remit involves reporting to Travis Barnes, global head of both Financial Sponsors and Sustainable and Impact Investment Banking.
A spokesperson for Barclays told FinanceAsia that Freier will focus on supporting clients as they navigate the transition to a low-carbon economy. Her provision of senior management resources in EMEA will complement Reilly’s base in the Americas. She will also work closely alongside Wei Lynn Chen, who heads the bank’s Sustainable and Impact Investment Banking team in APAC. A successor for her previous role leading ESG research will be announced in due course, the contact added.
Freier first joined the bank in early 2021 after 14 years spent at Sanford (AB) Bernstein, where she served as co-head of European Sales and was global head of ESG. Her recruitment follows that of Daniel Hanna in London earlier this month, as global head of Sustainable Finance for the corporate and investment bank.
According to Hanna’s LinkedIn profile, he is currently on gardening leave from Standard Chartered, where he spent nearly 19 years in total, at the bank’s London and Qatar bases. He was most recently the bank’s global head of Sustainable Finance.
“Barclays was one of the first banks to commit to net zero by 2050 and has a fantastic track record of innovation in green and sustainable finance,” Hanna said in the release announcing his appointment.
“As the world deals with the impact of high energy prices and climate change, Barclays has a strong platform to help channel capital to the new technologies, and companies, that can help economies decarbonise and drive sustainable growth.”
Regional ESG push
In a special ESG report published by the bank on September 06 which was shared with FA by email, the bank considers Asia Pacific as holding “immense potential for the development of ESG markets”.
Research undertaken for the report detailed that, while the region is home to just 4% of global ESG assets under management (AUM), the AUM growth of Asia-based ESG funds has outpaced every other region since the start of 2021. China, Japan and South Korea have led in terms of issuance, while Hong Kong and Singapore have jockeyed for recognition as future offshore green investment hubs. Analysis by the bank suggests that APAC’s ESG star “is rising”, with 26% of ESG engagements by global asset managers being with firms based in Asia Pacific.
Although following last year’s COP 26 conference almost every major APAC economy announced commitments to a net-zero agenda that will see measured progress in line with the Paris Agreement by 2050, three key Asian markets have set later goals: China (2060), Indonesia (2060) and India (2070). These countries were the region’s top three coal producers and among the world’s top 10 carbon emitters in 2021, according to data provided by BP Energy Statistics.
Furthermore, the research identified several of Asia’s economies as being rated “critically insufficient” in terms of emission reductions to limit global warming, with the support of data from the Climate Action Tracker, which interrogates market activity up to May 2022. This contrasts other regions including the EU and the US, which are deemed merely “insufficient”.
Indeed, economic uncertainty fuelled by geopolitical tensions has also impacted carbon transition efforts. With a high dependence on oil and gas, combined with recently heightened risks such as energy shortages and imported inflation, some Asian nations have boosted fossil fuel output in recent months.
Other nations including Indonesia, have failed to phase out fossil fuel subsidies in light of sharp price rises. These increased from $160 million in January 2021 to $710 million at the start of this year, according to the ISEAS-Yusof Ishak Institute. In May, Indonesia’s Ministry of Finance announced an additional energy handout totalling $23.8 billion.
In a recent interview with FA, Fabby Tumiwa, strategist and executive director of the Institute for Essential Services Reform (IESR), an Indonesian energy policy and environmental think-tank, detailed the government’s most recent threefold subsidy increase as the most acute result of the Ukraine crisis in Indonesia.
“Oil prices are very sensitive politically: they affect inflation rates and could dampen the economy’s recovery from Covid-19. The government is aware of this and so decided to subsidise the price of oil. They didn’t want the high oil prices to shock the economy,” he said.
Turning challenge into opportunity
The bank's report highlights a number of other challenges as affecting Asia’s ESG landscape. These include governance issues, biodiversity loss and extreme weather. However it also details the opportunity offered by the region; including moves by Asia’s regulators to increase transparency across ESG data, and the development of credible carbon markets.
The research underscores that APAC’s transition to net-zero will spur investment – with around USD26-37 trillion required across energy infrastructure alone. It points to transport, building materials, and agriculture as among the first sectors likely to benefit from a large-scale ESG investment drive.
Although it might be starting from somewhat of a low base, the bank sees elevated potential in the region, and sustainability initiatives globally.
