A survey by Cambridge Associates shows a near 150% increase in institutional sustainable investments over the past four years.
The bi-annual client survey also shows that the UK and Europe have led the industry in implementing sustainable engagements. Nearly a third of non-US respondents engaged in impact investing have over 50% of long-term portfolios allocated to sustainable investments, while half of US respondents have less than 5% allocated.
Since the inaugural survey in 2016, there has been a 146% increase in the number of institutional investors who report making sustainable and impact related investments. Resource efficiency & climate change were the top priorities for sustainable and impact investors in 2020 and more than a third (35%) of respondents engaged in sustainable and impact investing consider racial and/or gender equity in investment decisions
According to the survey, institutions continue to employ a range of strategies including ESG integration, impact investing, negative screening, and program-related investments. ESG integration rose significantly over the last two years, as did impact investing, in a shift away from negative screening as a commonly employed approach.
“Many of our clients see the integration of sustainability as a source of competitive advantage. We are particularly proud to be working with some real thought leaders in endowments and foundations who are setting ambitious objectives like the achievement of net carbon zero.” said Annachiara Marcandalli, Head of Sustainable Investing for Europe. “We also see private wealth owners and family offices at the forefront of this trend, driven by a long-term time horizon that is a natural match to sustainable investments, personal values, and interests expressed by next-generation family members.”