The survey, conducted during our sister publication Expert Investor’s recent ESG Congress in Berlin, found that 58% of fund selectors believed that over the next three years ESG would become more integrated in their company’s fund selection and portfolio construction process.
But the same proportion of selectors (58%) currently had 50% or less of their portfolio weighted towards ESG strategies, and a further 31% said they did not use any ESG strategies.
Though fund selectors had low weightings towards the strategies, 33% of respondents believed ESG would become a more widespread alternative to mainstream investing, and 9% said it would remain a niche area of interest.
Another 51% said ESG would be an increasingly important consideration when it came to allocation decisions. It was sometimes a consideration for 21%, always a consideration for another 21%, and never a consideration for 7% of the fund selectors surveyed.
The survey also found that fund selectors’ interest in ESG mainly came from client demand at 78%, followed by internal pressure to improve improve long-term investment results (10%), regulatory pressure (6%), and worries about adverse publicity (4%).
The survey also found that 60% of respondents did not have any exposure to green bonds and the remainder had a small exposure.
While over half (53%) disagreed that passive investing was a solution towards mainstreaming ESG, 34% agreed that it would, and 12% responded with ‘neither’.
