According to a recent poll of investment consultants in the U.S. socially responsible investing and an attention to environmental, social and corporate governance (ESG) factors are here to stay. In the survey, which was conducted by the Social Investment Forum (SIF) and Pensions & Investments, noted that 88% of respondents believe that client interest in ESG will continue to grow over the next three years, and none believe it will decrease.
The survey asked recipients to indicate whether they advise clients on any of six ESG integration approaches: proxy voting; corporate engagement; exclusion of stock/bonds in a portfolio; integration of ESG analysis into investment decision making; inclusion of stock/bonds in a portfolio (best-in-class); and positive selection according to sustainable themes (climate change, etc.)
Of the six ESG strategies, respondents were negative on balance about only one–excluding stocks and bonds from a portfolio–with 41% saying it has a negative impact on portfolio performance. In addition, for each of the six strategies, a full quarter to a third of all respondents said they did not know whether the strategy had a positive, negative or no impact.
Collectively, the investment consultants gave the highest marks to “positive selection according to sustainable themes” such as climate change (with 49% of respondents saying such a strategy has a positive impact), followed closely by corporate engagement (48%).
This survey was adapted from a similar poll carried out by Eurosif, which is a pan-European membership association dedicated to addressing sustainability through financial markets. The U.S. survey was based on 41 respondents from 40 firms that ranged in size from four top firms with assets under advisement (AUM) of greater than $1 trillion, down to three firms with less than $100 million AUM each. The Social Investment Forum (http://www.socialinvest.org) is the U.S. national nonprofit membership association for professionals, firms and organizations dedicated to advancing the practice and growth of socially responsible investing.
The full survey report is available online here.