A new survey has determined that more than half of investors still consider ESG factors as crucial when it comes to asset allocation in portfolios. 63% of investors consider environment to be important while 58% and 51% consider governance and social factors to be important.
Fidelity International, a global asset manager, conducted the survey, which involved more than 120 intermediary and institutional distributors across Asia and Europe and centered on investor interest in integrating ESG factors into their portfolios. The survey showed that European and institutional investors placed greater emphasis on ESG factors in portfolio asset allocation.
It also examined sustainability themes, determining that investor attention on environmental factors, the preservation of natural capital, the transition to renewable energy and decarbonization had increased, most likely due to influence by steady commitments from policymakers and investors to achieve net-zero carbon emissions.
Coming in second on what investors were interested in was corporate transparency, reinforcing the desire for strong corporate governance from investors. In addition to this, the survey investigated barriers to ESG adoption, determining that challenges assessing impact was a huge barrier to the advanced adoption of sustainable investing.
Inconsistent regulations or changes to these rules was another barrier identified by investors. 66% of investors in Asia also admitted that the insufficient availability of premium strategies/products was a barrier to adopting sustainable investing, a high figure when compared to Europe’s 31%.
When investors were queried about how they could create positive impact efficiently, 59% asserted that impact investing was the best way to go about it. 52% held the opinion that exclusionary screening was a good option while 44% argued that government policy and regulation and individual company engagement were the most efficient ways to create positive impact.
However, the investors noted that a multifactor approach was required when it came to driving change.
Jenn-Hui Tan, the organization’s chief sustainability officer, stated that further progress was required to demolish implementation barriers to ESG investing. Tan explained that the barriers included challenges measuring impact, noting that difficulties obtaining and analyzing reliable data and dealing with regulatory inconsistencies across national and global frameworks were still a huge issue.
Tan added that from their survey, product availability still trailed behind Europe in Asia, revealing that the region’s primary focus was transition finance. This, she continued, was being driven by national transition plans and innovative frameworks and was expected to spur increased product innovation to meet growing demand from clients.
With more companies like Coyuchi Inc. going all-in in their implementation of ESG principles, it is just a matter of time before the general consensus within the investment community fully supports ESG.
NOTE TO INVESTORS: The latest news and updates relating to Coyuchi Inc. are available in the company’s newsroom at https://ibn.fm/COYU
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