Sustainability is a “hot” topic these days. This year is the warmest on record, with a rise of heat-related morbidities and mortalities around the globe. Torrential rains recently inundated parts of China, Japan, India and South Korea with flash floods and landslides, upending millions of lives.

To minimise the human and environmental toll, it is imperative that the investment industry consider sustainability metrics to direct capital towards halting climate change and preserving life, while generating long-term returns. However, the lack of high-quality, standardised environmental, social and governance data poses an important challenge. This is especially true for Asia, a diverse region with varying levels of disclosure, where real asset investors turn to ESG rating providers for comparable information.

As reliance on these ESG rating agencies grows, so does the need for greater oversight of methodologies and potential conflicts of interest. There is increasing s