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ESG risks put $4 trillion of Asian debt in peril

TOKYO – At a moment of maximum drama for China Inc, S&P Global Ratings just offered Beijing a glimpse of what global investors might be obsessing about in the year to come: ESG risks.

In a new report, S&P delves into the murky question of whether Asia’s investment opportunities are keeping up with the fast-increasing emphasis of money managers on environmental, social and governance (ESG) factors. The ratings company’s answer: Hardly.

S&P, in its review of more than 500 companies, argues that ESG shortcomings imperil nearly 60% of rated Asia-Pacific firms, involving more than US$4 trillion of debt. That’s roughly two-thirds of the region’s total debt pile.