BDO Unibank’s foray into sustainable investments continues to pay dividends even amid the pandemic, following the global trend of strong growth in environmental, social and governance (ESG)-themed investments.
A 54-megawatt wind farm in Pililla, Rizal with 27 turbines generates clean energy and is also a spectacle among local tourists. This is one of the many sustainable energy projects BDO Unibank, through its investment banking arm BDO Capital & Investment Corp., has funded along with other local commercial banks.
Economic pundits observed that COVID-19 has only strengthened the importance of ESG as investors look for more resilient investments amidst economic uncertainties brought about by the pandemic.
Globally, assets under management (AUM) anchored on sustainable investments jumped 29% in the fourth quarter of 2020 to $1.7 trillion.
Domestically, BDO’s ESG Unit Investment Trust Fund (ESG UITF)—the first of its kind in the Philippines—posted returns of 13.95% and 19.90% in the last six and three months, respectively, leading to end-December 2020.
As of end-2020, the value of the AUM of this instrument grew 79% to PhP99.4 million from P55.5 million in 2016.
From Php55.5 million in 2016, the AUM of BDO ESG UITF have grown steadily to Php60.1 million in 2017, Php66.6 million in 2018, Php75.2 million in 2019, and Php99.4 million in 2020.
The BDO ESG UITF followed a similar higher return performance shown by ESG funds globally, proving the importance of sustainable business practices.
“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.
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” the Bank added.
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