Trust, data and due diligence: The new playbook for risk in Asia
Across Asia, investors are redefining risk. What once sat in compliance checklists and back-office reporting is now a direct driver of capital allocation. Tighter regulation, pressure from global asset owners, geopolitical volatility and a surge in data-driven risk analytics are driving Asian allocators to embed business conduct-related insights into the heart of portfolio construction, monitoring and stewardship.
Asset managers now rely on granular risk data, geopolitical overlays and stress testing to navigate greater complexity. Asset owners expect deeper transparency into portfolio risks and increasingly link allocation decisions to resilience, liquidity and sustainability-related exposures. Together, these shifts mean risk management now materially influences where, how much and why capital is allocated across Asia's investment landscape.
When it comes to sustainability and business conduct risk, Asia’s regulatory environment is ever-more aligned with the EU. As other markets tighten due diligence and accountability standards, Asia is moving away from long-standing reliance on voluntary corporate practices, building on the groundwork laid by the Guidelines on Environmental Risk Management for Banks in Singapore. In Japan, the new sustainability disclosure standards from the Sustainability Standards Board of Japan align closely with those of the International Sustainability Standards Board.
As the drivers of risk management change, asset managers globally are converging around an opportunity for competitive advantage – not in avoiding exposure to the risk of penalties, but in gaining a strategic edge through active management of business conduct risk.
How to turn conduct risk into a competitive advantage
AsianInvestor (AI): What kinds of business conduct risk could materially impact an investment?
Lisa Long (LL): Business conduct risks can escalate quickly and have a direct impact on financial performance, valuation and investor confidence. At RepRisk, we see this across markets and asset classes every day. These risks typically include reputational damage, litigation, increased scrutiny from banks and partners, disruption of commercial relationships, regulatory penalties and loss of investor trust.
One way to think about this – and something we often hear from institutional clients – is the analogy of business‑conduct data functioning as an insurance policy. The “premium” they pay for high‑quality, daily‑updated data is far lower than the cost of the claims they are protecting themselves against. A large global investor once described it to us in very simple terms: “The cost of one serious conduct failure can exceed a decade of data spend.”
This is why investors across Asia are integrating conduct‑risk signals directly into their investment processes. Not to avoid every controversy, but to ensure they recognise and respond to material risks early, before they crystallise into financial losses.
AI: How is technology changing the way portfolio managers and investors assess and respond to emerging business conduct risk?
LL: Information volumes are growing faster than any team can process manually. Technology helps investors distinguish genuine risk signals from noise, and then integrate them directly into portfolio systems.
Structured thematic scores enable apples-to-apples comparisons across issues such as human rights, corruption, or greenwashing, which are particularly valuable in high-risk sectors. Granularity at the asset level supports more precise screening, engagement and position sizing.
Many RepRisk clients spot early indicators of governance or regulatory pressure well before issues surface in public disclosures. And by embedding conduct-risk insights across public and private markets, investors gain a consistent, enterprise-wide view of exposure.
AI: All of this is moving the industry toward a more predictive, forward‑looking posture. And it raises bigger questions: as technology evolves further, how far can AI support investment risk management? And where are its limits?
LL: AI massively scales analysis. Without AI, RepRisk could not analyse 2.5 million documents from 150,000 sources each day. But it requires strong guardrails. Without them, models can hallucinate, misclassify entities, or pull incorrect sources, creating real liability for investors.
Source quality, historical completeness and traceability matter. Investors need defensible, auditable data – something generic web scraping cannot ensure. The strongest solutions combine human oversight with AI scalability: experts verify context and relevance, while models deliver speed and pattern recognition. The result is a hybrid, institutional-grade system that reduces model risk while supporting confident decision-making.
In short, today’s most robust investment processes are AI-powered but human-led.
AI: What does the future hold for business conduct data?
LL: AI agents will transform how investors interact with data. As one of Microsoft’s Frontier Firms, RepRisk is exploring how context-aware, goal-driven AI can support risk teams, streamline workflows and enhance issue detection.
Leading investors already use AI tools collaboratively, stress-testing assumptions, identifying blind spots and shaping more resilient investment processes. Agentic delivery is the next evolution, empowering decision-makers to access business conduct data anytime, anywhere – and in ways that drive lasting value and impact.
Click here to learn more about how RepRisk is scaling both artificial and human intelligence to deliver deeper, more flexible business conduct risk coverage.
About RepRisk
RepRisk is the world’s most respected Data as a Service (DaaS) company for reputational risks and responsible business conduct. Since 2007, RepRisk’s data has been trusted by the world’s leading banks, investment managers, Fortune 500 companies, sovereign wealth funds, and organizations such as the OECD and UN. Combining advanced AI with deep human expertise, and a proven methodology at the core, RepRisk’s solutions bring peace of mind, enabling clients to ‘know more, be sure, and act faster’. Our pioneering solutions help to strengthen due diligence processes across business conduct topics, such as biodiversity, deforestation, human rights, and corruption, empowering clients to identify, monitor, and mitigate reputational, compliance, and financial risks. Visit us at reprisk.com and follow us on LinkedIn.