The latest Schroders Global Investor Study has found that the impact of COVID has increased investor interest in ESG despite demands for better data.
The survey of 23,000 people from 33 global locations found that 57% and 55% of investors respectively are now placing greater importance on social and environmental issues. However, 53% of investors believe that data demonstrating that investing sustainably delivers better returns would encourage them to increase their allocations.
40% of investors said that regular reporting highlighting the impact their investments are having would lead them to increase their sustainable investments and 36% would like to see some form of self-certification from the investment manager that their investments are sustainable. 57% say they would be happy to move to an entirely sustainable portfolio as long as the same level of risk and diversification was maintained.
The study also asked what controversies would drive people to withdraw from investments. 65% of investors stated they would sell out if their investments were impacted by financial or accounting scandals. This was ahead of 61% of investors who cited cyber hacks and 60% that had identified a climate change catastrophe as reasons for divestment.
Andy Howard, Global Head of Sustainable Investments, Schroders, commented:
“These findings have laid bare the growing expectations now being placed on asset managers when it comes to addressing climate change. We are focusing on ensuring the investments we manage for our clients are aligned to the transition toward a more sustainable planet, and benefit from the opportunities that transition will bring.
“As investors and guardians of our clients’ assets, we seek to actively influence corporate behaviours so that the companies in which we invest are sustainable and resilient.
“At the same time, despite this greater profile for asset managers, there is still clearly more to be done to demonstrate to investors that a sustainable focus does not have to compromise returns. Indeed, we see sustainable value creation as intrinsically linked to successfully navigating social and environmental challenges.
“We need to ensure we give our clients the information they need to assess our performance across the areas that matter to them. At Schroders we are taking these findings very seriously. We have a responsibility to show leadership on key sustainability issues and how we are meeting our clients’ evolving needs in this area.”