BDO broadens ESG investments

MANILA, Philippines — BDO Unibank Inc. is broadening its portfolio of environmental, social and governance (ESG)-themed investments as investors continued to search for higher returns despite uncertainties brought about by the COVID-19 pandemic.

The size of the ESG unit investment trust fund (UITF) the first of its kind in the Philippines surged by 32 percent to P99.4 million last year from P75.2 million in 2019.

Assets under management (AUM) of the country’s largest lender have grown steadily from P55.5 million in 2016, P60.1 million in 2017, and P66.6 million in 2018 and continues to pay dividends even amid the global health crisis.

“While the fund is still small, it has the potential to grow in size and importance as more investors are consciously looking for companies that protect the environment, are socially responsible, and practice good governance in a sustainable manner,” BDO said in a statement.

The BDO ESG UITF allows investors to see value in socially responsible companies as an investment destination for their funds, and to invest in one fund that covers several companies, instead of investing separately in every local company that they believe creates a positive contribution to society.

“Its importance is further heightened during this time of the pandemic, as sustainable investment amplifies the bank’s resiliency to unforeseen global or local crises,” it said.

The fund managed by BDO followed a similar higher return performance shown by ESG funds globally, proving the importance of sustainable business practices.

It posted returns of 13.95 percent and 19.9 percent in the last six and three months, respectively, leading to end-2020.

The COVID-19 pandemic has strengthened the importance of ESG as investors look for more resilient investments amid economic uncertainties brought about by the global health crisis.

Globally, AUM anchored on sustainable investments jumped by 29 percent in the fourth quarter of 2020 to $1.7 trillion.

The Bangko Sentral ng Pilipinas (BSP) has rolled out a two-pronged approach in promoting ESG principles via capacity building and awareness campaign as well as mainstreaming ESG principles through the issuance of enabling regulations.