There continues to be questions as to the speed of uptake of ESG (Environmental, Social and Governance) factors into the mainstream investment process. Earlier this month, Ian Aylward of Aviva Investors wrote an article in FTAdvisors that outlines details of a survey they recently conducted with fund managers.
The following are some excepts from the article:
- According to 31 global fund management houses with combined assets under management of roughly £4trn, the majority considers ESG to be relevant to their broader business.
- 68% of respondents believed there to be a link between ESG performance and total returns.
- 43 % have a dedicated ESG/SRI resource and 55 per cent subscribe to an ESG information provider.
- 84% of respondents also stated that managers and analysts consider ESG factors as part of their processes. Generally the governance part of ESG tends to receive the most attention and it is not surprising to note that the same number of respondents vote actively and have a voting policy in place.
- 90% of respondents believed that ESG issues are important for clients. It does not seem like a huge leap to assume that if this is representative of the feedback asset managers are getting from their clients we are likely to see ESG factors playing a larger role in the mainstream going forward.
- 74% of respondents expect ESG factors to be incorporated in all mainstream funds in the future.
The results of the survey are telling, although for those of us in North America, we need to remember that Europe is leading the way … but the trend remains the same. If anything, I believe that surveys of this kind should be a wake-up call for fund managers here in Canada. The competition is moving. The question is, are you?