Posted inESG

Fund selectors talk up ESG but slow to take action

Tree inside the lightbulb

The survey, conducted during Expert Investor’s recent ESG Congress in Berlin, found that 58% of fund selectors believed that over the next three years ESG would become more integrated in their company’s fund selection and portfolio construction process.

But the same proportion of selectors (58%) currently had 50% or less of their portfolio weighted towards ESG strategies, and a further 31% said they did not use any ESG strategies.

Though fund selectors had low weightings towards the strategies, 33% of respondents believed ESG would become a more widespread alternative to mainstream investing, and 9% said it would remain a niche area of interest.

Another 51% said ESG would be an increasingly important consideration when it came to allocation decisions. It was sometimes a consideration for 21%, always a consideration for another 21%, and never a consideration for 7% of the fund selectors surveyed.

The survey also found that fund selectors’ interest in ESG mainly came from client demand at 78%, followed by internal pressure to improve improve long-term investment results (10%), regulatory pressure (6%), and worries about adverse publicity (4%).

The survey also found that 60% of respondents did not have any exposure to green bonds and the remainder had a small exposure.

While over half (53%) disagreed that passive investing was a solution towards mainstreaming ESG, 34% agreed that it would, and 12% responded with ‘neither’.

Jassmyn Goh

Jassmyn reported from Sydney to New York to Jakarta before joining Expert Investor. She was most recently Features Editor at Money Management and Super Review in Sydney.

Part of the Mark Allen Group.