The vast majority (84 per cent) of asset managers are either implementing or evaluating the sustainability of their portfolios, according to a survey by FTSE Russell.
The results indicate a significant increase in the percentage of asset managers concerned about sustainability issues. In a similar survey from 2018, just 53 per cent of respondents had been implementing or evaluating the possibility of eventually implementing sustainability into their portfolios.
North American asset managers remain more skeptical of the need to implement sustainability into portfolios than their peers around the globe. About 32 per cent of North American respondents reported making no efforts to implement sustainability, down from 81 per cent in the 2018 survey.
This year’s survey also found that this interest is being fuelled by risk management concerns. Three-quarters (67 per cent) of respondents cited the need to mitigate long-term investment risks as the key factor for considering portfolio sustainability.
It also found that U.S.-based asset managers consider social issues to be the most important environmental, social and governance issue. Respondents from the rest of the world were more inclined to view environmental concerns as being of the highest priority.
A similar survey by Schroders found Canadian institutional investors are placing less importance on governance issues than their peers.
About 40 per cent of Canadian institutional investors reported increasing their focus on social issues in the past year, while the global average was 55 per cent. Slightly more (44 per cent) of Canadian respondents said the focus on environmental issues had increased in the past year, while the global average was 57 per cent.