But there is marked difference in approach between large and small insurers, the survey found.
Just 35% of insurers take ESG-criteria into consideration when making investment decisions, Axa IM’s survey among 122 insurance companies in France, the UK and Germany found. However, it is mainly the smaller insurance companies that ignore the criteria.
Among insurers with assets under management (AUM) of over €5bn (£4.3bn, $5.3bn), 52% of respondents invested in funds or mandates that employ some form of ESG-screening.
Regulatory pressure
But perhaps that’s just the case because large companies face tighter supervision by regulators. “Tighter regulation” was the reason given by 53% of survey respondents as the main driver behind ESG implementation.
Almost half of French respondents, 39% of German and 31% of UK insurers plan to increase their allocation to ESG investments
However, four in 10 respondents also said that better performance is also a motivation to implement ESG-policies. And ESG is set to gain in popularity and become more mainstream among insurers, according to the survey.
Almost half of French respondents, 39% of German and 31% of UK insurers plan to increase their allocation to ESG investments in the next 12 months, while none intend to decrease it.
This suggests investors of all stripes agree that ESG will become a dominant force in portfolios over the years to come.
Research by our sister publication Expert Investor, conducted earlier this year, found that a large majority of European fund selectors believe ESG-criteria will become “more integrated in fund selection and portfolio construction”.
Only one in five think ESG will remain a niche area.
