Working on M&A deals and IPOs in the Hong Kong office of JPMorgan exposed a young investment banker to the growing significance of ESG issues, long before they became widely recognized under that name. Soon after she read The Blue Sweater, a firsthand account of Jacqueline Novogratz’s journey from international banker to social entrepreneur. Around the same time, The Rockefeller Foundation coined the term impact investing. That was almost twenty years ago; today Katy Yung leads Sustainable Finance Initiative (SFi) as its CEO, championing a new era in wealth and purpose through one of Asia’s most influential impact investment networks.

“I also took a lot of public policy and development courses in college. Impact investing felt like a good middle ground to use my banking skills to solve social problems,” Yung recalls. “At the same time, the social enterprise movement was starting in Hong Kong.” This convergence of events steered Yung to join RS Group, a Hong Kong family office, in 2010 to lead its impact investing journey.

Katy Yung

By 2016, RS Group had achieved significant milestones, with 70-80% of its investment portfolio aligned with impact objectives. Its comprehensive report on this journey attracted attention from Asian family offices, prompting requests for knowledge sharing and mentorship. SFi was born in 2019 to meet this growing demand.

Since taking the helm full-time in 2020, Yung has built a thriving community of family offices, impact funds, and like-minded investors. Under her leadership, SFi has grown its membership to over 100 members. The initiative has screened more than 800 impact investment opportunities in the past four years, recommended 60-70, and members of SFi have made 17 direct investments through this process.

“Our North Star has not changed. It’s about catalyzing private capital towards sustainable finance in Asia,” Yung emphasizes. SFi initially focused on matching family offices with emerging impact funds. In fact, SFi provided the due diligence support that led to several members making their first impact investments in LeapFrog Emerging Consumer Fund III. Signature events, such as its annual impact summit, have further cemented SFi’s role as a hub for sustainable finance.

Despite its successes, SFi continues to evolve. “We’re not as far as we’d like to be,” admits Yung. One area of focus is upskilling family members and private bank advisors through partnerships with the Center for Sustainable Finance and Private Wealth (CSP). SFi also launched the New Impact Society, an initiative offering financial courses to broaden understanding of sustainable investing. International institutions such as UBS, Pictet, and Cambridge Associates offer additional opportunities to foster knowledge sharing and best practices. Yung believes these partnerships, combined with Hong Kong’s strategic position as a gateway to China and Southeast Asia, give the city a unique edge in sustainable finance.

Positioning Hong Kong as an impact investment hub

With over 2,700 family offices in the city undergoing intergenerational wealth transfers, Yung sees immense potential for blending philanthropic and investment capital. This trend, she notes, is driving interest among next-generation family members who are keen to align their investments with their values.

Asian Family Office Investment Themes; Courtesy of Sustainable Finance Initiative

Yung has been instrumental in advocating for policies that support impact investing. SFi members contributed to the Financial Services Development Council’s (FSDC) 2024 white paper on Hong Kong as the Impact Investing Hub of Asia, pushing for key recommendations such as prioritizing SDGs, unlocking dormant funds, offering tax incentives for sustainable investments, and creating frameworks for blended finance.

Innovation in financial structures is a particular priority. Yung envisions Hong Kong leading the way in creating blended finance models that merge philanthropic and commercial capital to tackle complex social and environmental challenges. These models can serve as a blueprint for other financial centers in the region.

SFi Members Event – A dialogue with Al Gore: Private Investors & The Net Zero Challenge

Compared to other Asian markets like Korea, Japan, or Singapore, Hong Kong’s financial infrastructure and deep capital markets offer significant advantages. Korea’s impact VC funds supported by the balance sheets of many of its corporations and banks and Japan’s wholesale impact fund of funds initiatives provide inspiration, but Yung is confident that Hong Kong can carve out its own leadership role through a combination of policy support, ecosystem-building, and strategic alliances.

Looking ahead, Yung sees Hong Kong developing into a regional hub for impact funds, impact venture capital, and a marketplace for sustainable bonds. SFi aims to contribute to this vision by advocating for government policies, building capacity within the sector through media engagement and thought leadership. “The vast majority of investors are not reading ImpactAlpha and the like. These narratives must flow more to mainstream media.” SFi wants to organize thought leadership workshops and roundtables to inform journalists on the latest in impact investing.

SFi Team at 2024 SFi Asian Family Impact Summit – Where Capital Meets Purpose

One focus area is impact measurement and how best to navigate the dual objectives of profit and impact. SFi has encouraged members to adopt existing frameworks like GIIN’s IRIS+ and third-party verification services such as BlueMark. Yung also highlights innovative approaches to impact measurement like Happiness Return, a long-term multidisciplinary approach introduced by Happiness Capital, a venture capital firm established by Hong Kong’s Lee Kum Kee Group.

A personal mission

Yung’s aspirations for SFi are ambitious. She envisions a Pan-Asian platform that extends beyond family offices to include impact-curious financial professionals who want to make a difference: “There is a lot of heavy lifting to be done. I hope to be curating some of these opportunities.” By broadening and deepening the funnel of participants, she aims to unlock more capital and democratize access to sustainable investing.

Katy Yung speaks at 2024 SFi Asian Family Impact Summit

For Yung, this subject is deeply personal. As a mother of three, she envisions her work as an opportunity to give back and shape a sustainable future for the next generation. Her unwavering optimism and resilience have been critical to her success. “Even if something doesn’t work, we keep going,” she says with determination.

After fifteen years in the field, Yung remains steadfast in her belief that the convergence of wealth transfer and sustainability trends will drive real action. Under her leadership, SFi is well-positioned to help Hong Kong lead this charge, catalyzing capital for a better world.