Institutional investors focusing on how to implement ESG
Institutional investors worldwide have demonstrated unwavering support for ESG investing, as revealed in separate surveys conducted by BNP Paribas and Barclays.
BNP Paribas conducted a survey from April to July, polling 420 asset owners, managers, hedge funds, and private equity firms. The participants were distributed across regions, with 50% in Europe, 28.6% in Asia Pacific, and 21.4% in North America. Collectively, these asset owners oversee $51.2 trillion in assets under management.
Key findings from BNP Paribas's fourth annual survey include a growing commitment to achieving net-zero emissions within organizations.
41% of respondents regarded net zero as a top priority, an increase from the 18% reported in 2021. Furthermore, 48% anticipate making it a priority within the next two years, compared to 33% in 2021.
The survey also highlighted a surge in interest in impact investing, with 54% of respondents indicating plans to invest in impact-driven strategies within the next two years, compared to the current 45%.
"Institutional investors have been transitioning from asking 'why' integrate ESG, to focusing on the 'how' of implementation," said Sophie Devillers, head of sustainable finance at BNP Paribas Securities Services, as quoted in Pensions & Investments.
The biggest impediment to ESG investing identified by respondents was limited data quality, with 71% considering it an obstacle to broader ESG adoption.
This was particularly highlighted in biodiversity data, where 66% of survey participants acknowledged the need for more comprehensive consideration of biodiversity loss and other environmental factors like water use, waste recycling, and ecosystem protection.
Regulatory requirements and concerns about reputation emerged as motivators for 60% of respondents. The survey also found that 51% of organizations represented by respondents had incorporated ESG expertise and data into their portfolio management and investment decisions, while 42% had integrated ESG expertise and data into their risk management processes.
Barclays, in its fourth annual ESG investor survey conducted in July and August, reinforced the continued backing for sustainable investing, particularly in the context of addressing climate-related emissions, human rights issues, and biodiversity concerns. The survey gathered data from 270 investors, including ESG specialists, portfolio managers, and research analysts across the United States, Europe, and Asia.
