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Investor appetite rises for ESG
11 December 2013
Many pension funds already use environmental social governance factors in their investment, according to new research by ING IM
Three quarters of investors believe that environmental social governance (ESG) factors are fundamental to the future of investment, according to new research by ING Investment Management (ING IM).
The findings revealed that two thirds of investors professionals responsible for pension funds already use ESG factors or a socially responsible investment approach in their investment processes.
Almost half (48%) say their appetite for ESG and SRI has risen over the past six months.
“In recent years there has been a shift within the industry towards more responsible investment products. This research underlines the importance – both professionally and personally – of ESG factors,” said Hendrik-Jan Boer, senior portfolio manager for ING IM’s SRI funds.
He added that ING predicts demand for SRI to grow in the next few years and to become more commonplace in investors’ portfolios.
The majority of respondents – 58% - said they wanted to incorporate responsible investment in their strategy out of a “sense of personal responsibility”, while 52% said it was company procedure to apply such criteria to investments.
“It is certainly positive to see that investors not only believe in the social and intrinsic value of ESG factors, but also believe in the effectiveness of applying such criteria to their investments. It is encouraging to note an anticipated shift in attitudes towards ESG from simply being a filter that investors feel they should implement in their portfolios to becoming a genuinely strong investment tool in its own right.”
Respondents in the developed economies were the most proactive in this area, the most keen being those in Western Europe (86%), followed by North America (36%) and then Australasia (24%).
Pension funds were the most willing to incorporate ESG factors (72%), followed by charities (62%).