A Bank of America Securities survey has found that climate change, governance and supply chains are the top priorities for institutional investors in 2021.

Governance was viewed by an overwhelming majority (81%) as the most important factor in managing financial risk. “S” issues such as diversity and community engagement saw less than a quarter of respondents viewing it as a big focus for 2021.

The survey also highlighted the sectors which respondents offered the biggest opportunity for ESG improvement: Oil & Gas (49%), Utilities (44%), Consumer Discretionary (34%) and Materials (31%). In a similar vein, Asia (41%) offered the biggest opportunities for outperformance from ESG improvement. 48% of survey respondents saw ESG as a greater priority post-COVID.

Meanwhile, nearly 80% of respondents said they use internal research to identify material ESG risks, complementing third party research. The standardization of corporate disclosure was the main concern for investors. Two thirds of respondents believe that less than 50% of global investors have yet to implement ESG in their investment process. And private markets, in particular, may be lagging, with just one third incorporating ESG in the investment process.