ESG: What Institutional Investors Are Saying about Sustainable Investing

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May 2018
Global, May, 25 2018 - According to the Global Sustainable Investment Alliance, by 2016 more than $22 trillion of assets, around a quarter of all investments globally, incorporated ESG to some extent or other.

At a Neuberger Berman conference, institutional investors discussed current trends in ESG investing.

At the recent Neuberger Berman ESG Investing Conference in Stockholm, Sweden, I was joined by senior decision-makers from the leading Swedish institutional investors AP1, AP3, Folksam, Länsförsäkringar and SEB, as well as Robert Eccles, Visiting Professor at the Saïd Business School and Founding Chairman of the Sustainability Accounting Standards Board (SASB). We discussed the range of objectives that asset owners have for ESG integration, the challenges of incomplete and non-standardized data, the growing expectation of engagement, and the opportunities fully to integrate ESG across the portfolio. The following article is based on the proceedings of the conference.

Few in our industry would deny that investing informed by Environmental, Social and Governance (ESG) factors is now mainstream, particularly among institutional investors. According to the Global Sustainable Investment Alliance, by 2016 more than $22 trillion of assets, around a quarter of all investments globally, incorporated ESG to some extent or other. At Neuberger Berman we've seen significant growth in interest from our clients, too. One measure of this is the proportion of due diligence questionnaires (DDQs) that we receive from institutional clients who ask detailed questions about our approach to ESG. In 2015, only around 5% of the DDQs that we received across asset classes from North American clients asked about ESG compared to around 15% for European DDQs. In 2017, that had jumped to around 50% in both geographies.

Professor Robert Eccles of the Saïd Business School shared results from his recent survey of 582 institutional investors in partnership with State Street's Center for Applied Research, at our recent ESG Investing Conference in Stockholm. His survey found that the most common reason why institutional investors were integrating ESG factors were because they believed it helps "foster a long-term investment mindset" and "cultivate better investment practices."



Source : Seeking Alpha
 

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