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September 21, 2018 at 03:11 PM
A new report from Newsweek Media Group’s Vantage Thought Leadership division says environmental, social and governance investing has gone mainstream, having gotten a boost from the Paris Climate Accord and adoption of the UN Sustainable Development Goals in 2015.
At the same time, it says, a significant gap exists between investors’ good intentions and action.
The report was based on findings from a survey of 281 asset owners and managers from across the world, 37% of which were based in the Americas, as well as a dozen in-depth interviews with leading investors and practitioners in ESG investing.
The survey found that climate change was the chief driver of ESG strategies, with 65% of respondents listing this as their top priority and a further 50% expecting to have divested from fossil fuels by 2030 — the UN’s target date for meeting sustainable development goals.
Three in five investors also had a specific policy on meeting the UN SDGs.
Still, many investors said they were faced with a lack of relevant investment information as well as a scarcity of ESG investment vehicles. As a result, they struggle to adopt ESG across their portfolios — just one-quarter of all assets globally are currently managed under ESG strategies, according to the report.
For sustainable investing to become the norm, the report argues, corporate reporting and standards must be improved, including, where appropriate, via regulation. “Otherwise, there is a risk that the current push to give investments the ESG label turns it into a box-ticking exercise.”
