How Singapore-based asset owners are helping set the pace for sustainable investing
In August and September 2025, State Street Investment Management, in partnership with FT Longitude, surveyed a broad range of Asia Pacific-based asset owners (“APAC-based asset owners”) on their approach to sustainable investing. This article examines how the Singapore-based asset owners in our survey (“Singapore-based asset owners” or “Singapore respondents”) are integrating climate, nature, and biodiversity objectives into their investment portfolios.
Many Singapore-based asset owners are turning their attention to sustainable investing. According to our survey, Singapore respondents are integrating climate, nature, and biodiversity objectives into a portion of their assets under management (AUM). At the same time, some Singapore respondents are considering the financial, regulatory and measurement challenges that accompany these investments.
Singapore-based asset owners help take the regional lead on sustainable investing
More than half (55%) of Singapore respondents are widely or fully integrating principles of impact investing into their investments – 14 percentage points higher than the average APAC-based asset owner in the survey. More than three quarters (77%) of Singapore-based asset owners say they assess the impact of these investments through an additionality lens, and 68% analyze the assets they invest in, including those in public markets, based on their contribution to sustainable outcomes.
Listed equities (65%) are the most popular asset class for impact-related investments among Singapore respondents, followed by fixed income (for example, green, social, sustainability and sustainability-linked (GSSS) bonds) (52%), private equity (52%) and real assets (52%).
Compared with the average APAC-based asset owners in the survey, Singapore-based asset owners are more likely to apply climate objectives to more than 20% of their AUM (77% versus 66%). When it comes to nature and/or biodiversity, almost half (48%) of Singapore respondents apply related objectives to more than 5% of their AUM, compared with 42% for the average APAC-based asset owner.
Singapore-based asset owners are investing in climate and biodiversity
- 77% of Singapore respondents are applying climate objectives to more than 20% of their AUM, compared with 66% for the average APAC-based asset owner
- 48% of Singapore respondents are applying nature and/or biodiversity objectives to more than 5% of their AUM, compared with 42% for the average APAC-based asset owner
In the next 12-24 months, 74% of Singapore-based asset owners expect to increase the share of AUM incorporating climate-related objectives and 68% say the same for nature and/or biodiversity. This compares with 66% and 56%, respectively, for the average APAC-based asset owner in the survey.
When choosing an asset manager for an investment mandate, Singapore respondents most often cite local market expertise and regulatory understanding (48%), and alignment with institutional values or missions (48%) among their top three criteria for consideration.
Risk motivations and practical constraints
Our survey findings show that, when it comes to climate investment, Singapore-based asset owners most frequently cite mitigating long-term investment risk, complying with evolving regulatory or policy requirements, and meeting stakeholder demand among their top investment motivations.
For nature and biodiversity investing, mitigating long-term risk is the top driver for Singapore respondents, alongside seeking to contribute to real-world biodiversity outcomes.
But the survey indicates more immediate constraints are holding Singapore-based asset owners back from achieving these goals. For climate, potentially lower or more volatile returns (45%) and a lack of scalable, investable opportunities (39%) are the challenges most commonly highlighted by Singapore-based respondents. These factors may limit the extent to which Singapore-based asset owners are able to address long-term risk through the opportunities that are currently available.
There is a similar pattern for nature and biodiversity. Complexity in measuring real world impact, a lack of data, and potentially lower or more volatile returns (all 42%) are the most frequently referenced challenges for Singapore-based asset owners. Together, these findings suggest that Singapore respondents may face practical obstacles in integrating nature and biodiversity considerations systemically into decision-making and reporting.
Singapore’s regulatory ecosystem supports sustainable investment
The Green Finance Action Plan1
An overarching roadmap designed to make Singapore’s financial sector a hub for green transition finance and to mobilize capital for Asia’s net-zero transition.
The Monetary Authority of Singapore (MAS) guidelines on environmental risk management (ERM) for financial institutions2
Supervisory guidelines that require banks, insurers, and asset managers to integrate, manage, and disclose environmental change—including climate change, biodiversity loss, pollution, and changes in land use—across governance and risk management.
The Singapore-Asia Taxonomy (SAT)3
A classification system that defines for financial institutions which economic activities qualify as green or ‘transitioning toward green.’
Multi-Jurisdiction Common Ground Taxonomy4
A comparison framework that maps and aligns the green taxonomies of Singapore, China, and the European Union to improve interoperability.
The Singapore Green Bond Framework5
The framework that governs Singapore’s sovereign green bond issuance (up to S$35 billion by 2030), aligned with the International Capital Market Association (ICMA) and Association of South East Asian Nations (ASEAN) standards.
In our survey, many Singapore-based asset owners are aware of limitations of tools, data, and investable pipelines when it comes to sustainable investing. How are they pursuing climate, nature and biodiversity-related objectives without compromising growth?
Implementing sustainable investment objectives
A number of Singapore-based asset owners we surveyed tend to favor scalable, measurable sustainable investment themes. Renewable energy generation (65%) is their top climate investment priority. Renewable energy investments seek to provide stable, long-term cash flows through contracts such as power purchase agreements, and tend to have clear, measurable outcomes that support disclosure expectations.6
When it comes to nature and biodiversity, Singapore respondents are most likely to invest via financial instruments (48%), followed by pollution, waste management and control (45%).
Fiduciary duty also plays a role in shaping these approaches of Singapore-based asset owners. More than 2 in 5 (42%) Singapore-based asset owners say their fiduciary duty requires them to view climate as a long-term value driver and 55% say the same for nature and biodiversity. Meanwhile, 42% of Singapore respondents cite their fiduciary duty requires a stewardship approach that aims to achieve positive outcomes for climate, nature, and biodiversity. Regular dialogue with portfolio companies is an important tool for 65% of Singapore-based asset owners when it comes to climate and 48% for nature and biodiversity.
This type of engagement is important, explains a senior sustainability professional of a Singapore-based asset owner: “Sustainability has to be approached in the context of profitability and the long-term viability of the company, which is why we believe sustainable investing must be approached from a bottom-up, fundamental view. In practice, that means most of our engagement is directly with companies themselves, particularly around their climate transition strategies and plans, and more broadly on improving climate disclosure and transparency.”
Singapore-based asset owners are also focused on the quality of companies’ plans. More than half (58%) of Singapore respondents check whether a company is disclosing scope 1, 2 and 3 emissions in accordance with frameworks such as the Taskforce for Climate-Related Financial Disclosures (TCFD) and 55% check whether they are delivering on climate-related targets. Meanwhile, 71% of Singapore respondents believe that board accountability should be required for both climate and biodiversity investing.
Many Singapore-based asset owners illustrate how climate, nature, and biodiversity objectives can be linked with risk management and stewardship practices. As markets mature and data and regulation evolve, Singapore-based asset owners appear to be in a strong position to help set the pace for sustainable investment across APAC.
The bottom line
We believe there are three ways to help integrate climate, nature and biodiversity investing into portfolios.
- Set well-defined, measurable climate, nature and biodiversity objectives that align with portfolio risk, return and regulatory requirements.
- Maintain a clear view of evolving regulation and policy requirements, and reflect these requirements in investment and stewardship processes.
- Prioritize access to robust portfolio and issuer-level data to support portfolio construction, monitoring and transparent reporting.
About the survey
In August and September 2025, State Street Investment Management in partnership with FT Longitude, surveyed over 100 senior decision-makers from asset owners in Asia-Pacific. The respondents represented a range of institutional investors based in Australia, China, Hong Kong, Japan, Malaysia, Singapore, South Korea, Taiwan, and Thailand. The survey explored how these investors are approaching the challenges and opportunities of integrating climate, nature/biodiversity, and impact-related investment objectives into their investment portfolios.