Investors say they have insufficient tools to measure the financial impact of embracing ESG metrics in their investment strategies, according to a new poll.
A survey of 118 organisations, including pension funds, endowments, insurance companies, sovereign wealth funds and asset owners, conducted for Morgan Stanley Investment Management found just 42% of investors felt they had adequate tools to assess the impact of ESG measures.
Despite this, the survey found that 84% of asset owners are already pursuing or contemplating integration ESG into their investment process.
In a media statement accompanying the survey, Hilary Irby, co-head of Global Sustainable Finance at Morgan Stanley, said the “strong commitment” to ESG among investors was encouraging but warned that the market should take heed of the data concern which, if addressed, could improve the appreciation of sustainable investing still further.
She 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
“With this growing momentum in sustainable investing, third-party managers have an opportunity to increase implementation by improving reporting tools and education, and developing capabilities to align portfolios with owners’ unique objectives.”
The survey found that 70% of asset owners had already implemented some kind of ESG strategy and nearly half of those (49%) had done so across their entire portfolio with 21% of those polled having done so for a portion of their portfolio.
78% of those polled said they were seeking to align their investments with the U.N. Sustainable Development Goals (SDGs).