Most asset owners into sustainable investing: Survey

A survey of large investors around the world found that a majority of them are pursuing sustainable investing to manage risk and drive returns.

This is according to a survey published last week by the Morgan Stanley Institute for Sustainable Investing and Morgan Stanley Investment Management.

Among the findings, 84 per cent of asset owners are pursuing or actively considering pursuing environmental, social and governance (ESG) integration in their investment process. Of that group, 60 per cent had begun implementing ESG strategies in the last four years.

"As interest in sustainable investing continues to rise, we see investors pursuing a range of approaches with their assets," said Mr Rui de Figueiredo, co-head and chief investment officer of the solutions and multi-asset business at Morgan Stanley Investment Management.

"The growing sophistication among asset owners about when and how to integrate ESG into the investment process creates opportunities to tailor strategies and provide customised portfolio solutions that help investors meet their financial and impact goals," he added.

While asset owners cite risk management and potential for returns as the top reasons for their interest in sustainable investing, they also said that better data and investment information were needed.

Of the respondents, 77 per cent agreed that they had a responsibility to address sustainability through their investments, but only 42 per cent said they felt they had adequate tools to perform such assessments.

The bank's co-head of global sustainable finance Hilary Irby said: "The survey results identify a strong commitment to incorporating ESG criteria into investment strategies among asset owners.

"However, there is still a gap between interest and implementation, with investors citing access to quality ESG data as a top concern."

She added that third-party managers have an opportunity to increase implementation by improving reporting tools and education.

The survey polled 118 public and corporate pensions, endowments, foundations, sovereign wealth entities, insurance companies and other large-asset owners worldwide.

Sixty per cent had total assets over US$10 billion (S$13.6 billion).

The survey gathered insights about trends, motivations, challenges and implementation approaches in sustainable investing.

A version of this article appeared in the print edition of The Straits Times on June 25, 2018, with the headline 'Most asset owners into sustainable investing: Survey'. Print Edition | Subscribe