Sustainable Investing Segues From Niche to Mainstream

“As investors increasingly consider sustainability factors across asset classes and investment products, we expect to see a shift toward better data tracking and reporting mechanisms,” Curtis Ravenel, global head of sustainable business and finance at Bloomberg, said in the statement. “This will increase credibility and improve measurement of impact across portfolios.”

The survey found that as sustainable investing matures, asset managers are putting financial considerations in the vanguard of their sustainable investment strategies.

Eighty-two percent of respondents said that robust environmental, social and governance practices could bring higher profitability and that companies with ESG practices may be better long-term investments.

Sixty-two percent believed that it was possible to maximize financial returns while investing sustainably.

More asset management firms are offering an increasing number of ESG-tailored investment vehicles and expanding investor choice, according to the survey. Sixty-three percent of asset managers said they employed multiple strategies across shareholder engagement, restriction screening, ESG integration, thematic investing and impact investing.

Nine out of 10 respondents reported that their firms would pour more resources into sustainable investing in the next two years. These were common strategies they cited for developing in-house skills and capacity:

• Employee training — 41%
• Dedicating more employee time — 36%
• Specialist hires — 34%

Some 70% of asset managers agreed that the industry lacks standard metrics to measure nonfinancial performance of sustainable investments. The field is wide open for better data and the development of impact measurement tools, Morgan Stanley and Bloomberg said.