As we embrace 2025, the spotlight on sustainability grows brighter. For investors, this new year marks a pivotal moment to embed Environmental, Social, and Governance (ESG) considerations into their strategies. ESG integration is no longer a regulatory checkbox—it’s a strategic driver for building resilient portfolios and unlocking sustainable growth.

Singapore has established itself as a leader in ESG regulations, setting a clear framework for investors. The Monetary Authority of Singapore (“MAS”) mandates compliance with Circular No. CFC 02/2022: Disclosure and Reporting Guidelines for Retail ESG Funds, which requires retail funds with ESG claims to demonstrate transparency and credibility. MAS also emphasises the integration of environmental risks through its Guidelines on Environmental Risk Management (2020), aligning with global standards like the Task Force on Climate-related Financial Disclosures (“TCFD”).

By aligning investment strategies with these regulatory expectations, investors not only ensure compliance but also gain a strategic edge in enhancing resilience, attracting responsible capital, and driving long-term value creation.

ESG Across the Investment Lifecycle

Integrating ESG considerations across every phase of the investment lifecycle ensures sustainability becomes a core pillar of value creation rather than an afterthought. Let’s explore how ESG can be woven into each stage:

1. Planning:
   Investors set the foundation by identifying sectors and assets that align with ESG priorities. This involves screening investments for sustainability alignment, benchmarking sectors, and engaging stakeholders to target high-potential opportunities.
2. Acquisition/Investment:
   ESG due diligence takes centre stage, focusing on assessing risks such as regulatory compliance, carbon footprints, social impact, and governance frameworks. These evaluations inform valuations and guide investment strategies toward sustainable growth.
3. Management:
   Active management includes setting ESG goals, tracking key performance indicators (“KPIs”), and implementing improvement plans. Monitoring frameworks ensure risks are mitigated, operational efficiencies are optimised, and the portfolio's overall ESG impact is strengthened.
4. Exit:
   Strong ESG performance adds significant value at the divestiture or exit stage. Assets demonstrating robust ESG credentials attract premium valuations and a wider pool of potential buyers, reinforcing the long-term benefits of integrating sustainability.

Baker Tilly’s ESG Solutions for Investors

At Baker Tilly, we recognise that ESG integration is a journey requiring specialised expertise and practical solutions. Our comprehensive services empower investors to embed sustainability into every phase of the investment lifecycle:

1. ESG Strategy Development:
   We work with investors to define ESG priorities tailored to their goals, identifying sectors and assets that maximise value while addressing key sustainability challenges.
2. ESG Due Diligence:
   Our detailed assessments evaluate risks and opportunities across environmental, social, and governance dimensions, enabling data-driven decisions during acquisitions.
3. Portfolio Management Support:
   We help establish robust ESG monitoring frameworks, set measurable targets, and implement actionable improvement plans to drive operational and sustainability performance.
4. Exit Optimisation:
   By enhancing ESG performance across the portfolio, we help clients increase asset valuations, attract responsible investors, and achieve successful exits.

With a deep understanding of ESG frameworks like TCFD, MAS regulations, and global best practices, Baker Tilly is your trusted partner for building sustainable, future-ready portfolios.

Next Steps

As we step into 2025, the need to integrate ESG into investment decisions has never been more urgent. Prioritising sustainability enables investors to drive positive change, mitigate risks, and uncover untapped opportunities for growth.

Don’t wait to make ESG a cornerstone of your investment strategy. Start your journey today with Baker Tilly, and build portfolios that deliver both financial and societal value.

Contact us today to learn how our team can help you navigate the evolving ESG landscape and create lasting impact!