SINGAPORE (Aug 19): The call for better environmental, social and governance (ESG) practices among businesses is no longer niche or restricted to the echo chamber of a handful of money managers and European pension funds. Globally, impact investing — which weighs financial gains equal to social and environmental impact — is worth half a trillion dollars today. In the first half of this year, net inflow of sustainable funds totalled US$8.9 billion ($12.4 billion), up from US$5.5 billion in the whole of 2018.

Yet, the topic still makes for uncomfortable conversation among Singapore enterprises, even those helmed by young owners taking over from their family. Many small and medium-sized firms still view these do-good criteria as part of philanthropy, says Annie Koh, professor and expert on family entrepreneurship and finance at the Singapore Management University.

“A lot of them see ESG today as something they have to do and [that is] good to do. But a lot of it probably comes from [the focus on] charity or foundation,” says Koh on the sidelines of her inaugural lecture on family businesses’ attitudes towards innovation. This may take the form of corporate social responsibility commitments or corporate donations.

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