Capital Group’s ESG Global Study 2022 shows that 40% of investors say a lack of product innovation is holding back ESG adoption.

In the survey, global investors report a lack of innovation in ESG products and services and say that there are not enough funds covering a spectrum of themes across ESG. The survey covers 1,130 institutional and wholesale investors located in 19 markets around the world in 2022.

Findings include:
• Nearly four in 10 (39%) of global investors think a lack of product innovation is holding back greater adoption of ESG
• Almost half (46%) of global investors think there are not enough funds aligned to the United Nations Sustainable Development Goals (SDGs)
• Nearly half (47%) also report that existing funds that target the SDGs overly focus on environmental issues
• 43% say there is a specific need for multi-thematic ESG funds.

“Investors looking to access a broad range of ESG themes must currently buy several single-thematic or narrowly focused funds, underscoring the need for all-in-one solutions that allow investors to target sustainability through the widest lens,” said Jessica Ground, Global Head of ESG, Capital Group.

“The demand for more innovative ESG funds may reflect a desire to diversify their holdings as investors recognise they need all-weather solutions that can adapt to changing market conditions and better withstand volatility. Furthermore, the study highlights a growing acceptance within the investment community that the transition towards a sustainable future cannot be achieved solely by backing companies that are already leaders at the expense of transitioning companies.”