November 14, 2018 / News

Most investors now have some form of ESG allocation

By Joe McGrath, ESG Clarity

Sustainable investors are finding water investments interesting, while micro-finance projects are out of favour

Most investors now have some form of ESG allocation

More than four out of five investors (81%), globally, now have some kind of sustainability, impact or ESG mandate as part of their wider investment policy, new data suggests.

The findings came in a research report from US firm Bright Harbor Advisors, conducted with respondents in 25 countries including family offices, financial advisers, pension funds, endowments and consultants.

When asked if they had any specific themes within their investment policy, 22.7% said they had an ESG policy in place, 16.4% said they had a social responsibility policy, 15% said they had a responsible investment policy and 14% said they had an impact investment policy. A further 12.5% said they had a broad sustainable policy.

“This is an important report that confirms the growing interest of institutional investors in seeking sustainable investments that meet the return criteria of their investment mandates,” said Rob Day, general partner at Spring Lane Capital, in a statement accompanying the research.

Of those investors that said they were familiar with sustainable investment approaches, water and wastewater treatment investments were considered to be the most appealing, followed by solar power and then sustainable food production.

Funds invested in micro-finance initiatives for those in poverty were considered the least appealing, followed by “waste-to-value” strategies and affordable housing.

When investors were asked to classify the investments that they had allocated to sustainable private fund managers, the majority (40%) said they considered them to be in “no formal bucket” while 22.1% considered their investment to be part of their private equity or venture capital allocation. A further 16.8% said they considered these investments to be Real Asset investments.

The majority of investors surveyed (68.1%) said they did not invest in dedicated carbon strategies concurrent with sustainable strategies.

The full report is available here.