Almost two-thirds (62 per cent) of pension funds and other institutional investors expect to increase their focus on environmental, social and governance factors over the next three years, according to a new survey for SigTech.

Pureprofile Pty Ltd., which surveyed 100 pension funds and institutional investors across Asia, Europe and North America, found that, while 14 per cent of respondents said they expect their focus on ESG issues to increase dramatically between now and 2024, seven per cent said it will decrease.

Fewer than half (43 per cent) of respondents said the environmental factor is the most important, while 31 per cent chose social factors and 26 per cent said governance is their main focus area.

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When asked which ESG factors would have the biggest impact on how pension funds and other institutional investors invest over the next three years, 85 per cent of respondents said they expect the focus on climate action to increase, followed by affordable and clean energy (68 per cent), good health and well-being (63 per cent), diversity (46 per cent) and clean water and sanitization (43 per cent).

“Just a few years ago it would have been a very daunting task for institutional investors to develop and implement their own index strategies, but it is now achievable,” said Daniel Leveau, head of SigTech’s strategic initiatives for institutional investors, in a press release. “Custom equity portfolios allow institutional investors to define the investable universe, tailor their investment strategy to incorporate specific ESG policies and to directly hold individual securities.

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