Whether it is choking smog in New Delhi and Beijing, worker suicides at Foxconn [part of Hon Hai] or management failures at Tepco, which ran Japan’s Fukushima nuclear plant, there is plenty of evidence that environmental, social and governance issues have a significant impact on returns for investors in Asia...ESG factors are becoming increasingly important in Asia...However, one of the main drivers is that the region is attracting western capital and with that comes western-style ESG...[G]overnments in Asia are...strengthening their regulatory mechanisms and enforcement capacity, particularly on environmental and social matters, narrowing the regulatory gap with developed markets...However, investors need to be wary of seeking one-size-fits-all solutions, as different ESG issues are most important in each market, reflecting very diverse natural resources, cultural aspects and states of development...For some investors, the lower standards in the region create opportunities. “We are happy to invest in companies that do not yet reach the highest standards, if we can reach an agreement that management will work to reach or exceed them in future,” says Paul Fletcher, senior partner at Actis...“As it becomes clearer that responsible investment is actually about delivering better returns through more robust risk management and stewardship, we would expect more Asian investors to come on board,” [says James Gifford, executive director of the UN Principles for Responsible Investment]. [Also refers to Adveq, GAM Star Geo, FTSE, M&G, Paras, Reckitt Benckiser, Sino-Forest Corporation]