Asian and LatAm investors play down ESG’s role

Fascinating insights are from a global poll of 200 professional fund buyers by CoreData Research

Professional fund buyers in Asia and Latin America do not believe ESG investment metrics are among the most important factors to consider when choosing new funds, a survey suggests.

A global poll of 200 professional fund buyers, conducted by CoreData Research found that 7% of fund buyers globally said ESG and sustainability factors were among the “most important” drivers in fund selection.

However, while one in 10 fund buyers in the UK considered ESG factors as “most important” no respondents in Asia and Latin America agreed.

Instead, past performance was the biggest consideration for those in Latin America (67%) while 64% of those in Asia said they considered past performance most significant. Only half of those polled in the UK agreed that past performance was a “most important” factor.

“The surprisingly small role assigned to ESG in the fund selection process may reflect difficulties evaluating the sustainable credentials of funds due to a lack of transparency and reported data,” said Craig Phillips, head of International, CoreData Research.

“While the market has seen a proliferation of ESG funds, there are growing concerns about so-called greenwashing,” he added.

Phillips’ sentiments on greenwashing were echoed in a poll of delegates at the Expert Investor ESG Congress in Berlin at the end of 2019.

The survey also identified some other interesting trends. Respondents in the UK and Latin America, for instance, said they watched active managers most closely. Seven in 10 UK buyers review these either monthly (20%) or quarterly (51%) and two-thirds of Latin American respondents review monthly (33%) or quarterly (33%).