Responsible Investing Accelerates as Acceptance Overtakes Skepticism.
Adoption of responsible investing principles continues to grow at a steady pace. And new data indicates that the majority of institutional investors and consultants have shifted from asking whether to adopt environmental, social and governance (ESG) principles to looking at how to implement them.
RBC Global Asset Management’s 2018 Responsible Investing Survey reveals the latest views, actions and intentions of institutional investors and consultants related to responsible investing and ESG. The survey reveals that ESG-based investing continues to steadily gain credibility and establish a solid position alongside other fundamental investment approaches. This trend is based on an increased level of acceptance about the investment merits of responsible investing, and an interest in applying its principles to more diverse asset classes, including fixed income and infrastructure.
The survey data hints that, while adoption of ESG investing principles has been increasing steadily in recent years, this trend has the potential to accelerate further as longstanding barriers to more widespread adoption, such as concerns that incorporating ESG principles could hurt returns or conflict with fiduciary duties, fall away.
The survey also demonstrates that responsible investing is solidifying its position not only in the minds of institutional investors but in the minds—and strategies—of investment consultants. And while ESG skeptics remain, their ranks are shrinking rapidly, particularly in the United States.
Offering a clearer view into specific responsible investment themes, the survey shows that impact investing and gender diversity continue to rank high on investors’ priority lists. At the same time, investors report little satisfaction with the quantity and quality of information from companies on issues such as sustainability and governance. And if anything is holding back greater adoption of ESG-integrated investing by institutional investors, it’s a lack of resources needed to do the work necessary to make it happen.