A growing percentage of portfolio managers and research analysts consider environmental, social and governance (ESG) issues in their investment analysis and decisions, but many receive no training for those efforts, according to a new survey from the CFA Institute.
The survey of close to 1,600 portfolio managers and analysts worldwide found that while 73% of respondents take ESG issues into account in their investment analysis and decision-making, less than one-third report that employees at their firms are trained to do so, and only about half consider ESG issues on a regular basis. Miscellaneous sources, including research papers, books, conferences and case studies were the primary sources for training in firms that provide it.
Risk management followed by client demand were the key reasons given by those who employ ESG analysis and investing.
Demand from clients is also the primary reason that respondents who don’t use ESG analysis would consider in reversing that position, according to the CFA survey.
Portfolio managers and analysts who use ESG factors apply them primarily to equity assets, followed by fixed income, and governance is the key ESG factor they consider. The most popular governance factors are board accountability and human capital.