State Street Global Advisors has urged major corporations to standardise the way they report ESG data, as it released new research on sustainable investing.
The asset management arm of State Street said investors were increasingly demanding better quality data from companies, explaining that improved reporting would help financial advisers be more responsive to client inquiries.
Its latest survey entitled Aim Higher: Helping Investors Move from Ambition to Action with ESG Investment Approaches, found 59% of investors said they thought it was important to invest in companies which are trying to improve the world for the next generation.
Around half of the those who haven’t yet incorporated ESG metrics into their investment process said that they intended to speak to their financial adviser about plans to do so.
Brie Williams, head of Practice Management at SSGA, said that financial intermediaries have an important role to play in assisting clients with their sustainable investment aspirations.
She explained: “Advisers are uniquely positioned to be a change agent in mainstreaming ESG investing. Growing investor demand for ESG strategies has sparked a surge in product development and fuelled the need for better guidance and advice.”
Williams’s sentiments follow similar comments from Parmenion fund manager Andrew Gilbert who urged advisers to spend more time understanding the ethical beliefs of their clients as part of the initial “fact find” process.
On Tuesday, SSGA released a new tool, designed to help advisers map an investor’s level of interest on individual ESG issues. The tool is based on a 15 point questionnaire which probes client aspirations beyond their financial goals.
Mirtha Kastrapeli, global head of research for the Center for Applied Research, explained: “Over the past several years, interest in ESG strategies have grown at a rapid pace, but like anything that grows too fast, it can inevitably lead to information overload and confusion.
“Our aim with this tool is to help investors cut through the noise and determine what issues are most important to them. Personally, we believe that having this clarity will help drive new and more productive conversations around ESG.”
The full report is available here.