Stockholm (NordSIP) – Echoing recent insights from the World Bank’s International Finance Corporation (IFC), a recent survey by the Financial Times found that 90% of wealth managers believe Covid-19 will raise investor interest in ESG investing. However, a review of wealth managers’ practices and expectations conducted by Refinitiv suggests they still have a long road ahead before they can tackle the challenges ahead.
According to the Refinitiv survey, around a quarter of wealth management firms are addressing investors’ ESG demands very well, 22% are doing a good job, 37% have room for improvement and the remainder are not addressing their needs sufficiently.
According to a webinar poll of wealth managers, the industry seems to be having different levels of success in integrating ESG into their investments process. 20% of firms consider ESG factors to be completely integrated, while the rest are evenly split, saying their ESG factors are not really well integrated (26.7%), partially integrated (26.7%) and integrated to a large extent (26.7%).
Refinitiv identified 4 main challenges to sustainable investors: standardisation, education, technology and resources and data. Regarding standardisation, wealth managers need to set minimum standards to allow for fair analysis.
The lack of standardised ESG reporting makes ESG data more opaque. ESG education and research matters because this theme is still relatively young, which means that there are still some facts to be uncovered and that financial professionals are not necessarily perfectly equipped to handle sustainability issues. Technology solutions, resources and data are crucial to facilitate investors’ and wealth managers’ due diligence efforts that the capital is going into investments that are truly focused on sustainability.
“Integrating ESG into a wealth management practice is far from straightforward and there are myriad factors to consider, from education, to branding, to market opportunities. But what really stands out, aside from the outperformance of ESG funds, is that it truly can and will have an impact on the future,” the report concludes.
Stockholm (NordSIP) – Echoing recent insights from the World Bank’s International Finance Corporation (IFC), a recent survey by the Financial Times found that 90% of wealth managers believe Covid-19 will raise investor interest in ESG investing. However, a review of wealth managers’ practices and expectations conducted by Refinitiv suggests they still have a long road ahead before they can tackle the challenges ahead.
According to the Refinitiv survey, around a quarter of wealth management firms are addressing investors’ ESG demands very well, 22% are doing a good job, 37% have room for improvement and the remainder are not addressing their needs sufficiently.
According to a webinar poll of wealth managers, the industry seems to be having different levels of success in integrating ESG into their investments process. 20% of firms consider ESG factors to be completely integrated, while the rest are evenly split, saying their ESG factors are not really well integrated (26.7%), partially integrated (26.7%) and integrated to a large extent (26.7%).
Refinitiv identified 4 main challenges to sustainable investors: standardisation, education, technology and resources and data. Regarding standardisation, wealth managers need to set minimum standards to allow for fair analysis.
The lack of standardised ESG reporting makes ESG data more opaque. ESG education and research matters because this theme is still relatively young, which means that there are still some facts to be uncovered and that financial professionals are not necessarily perfectly equipped to handle sustainability issues. Technology solutions, resources and data are crucial to facilitate investors’ and wealth managers’ due diligence efforts that the capital is going into investments that are truly focused on sustainability.
“Integrating ESG into a wealth management practice is far from straightforward and there are myriad factors to consider, from education, to branding, to market opportunities. But what really stands out, aside from the outperformance of ESG funds, is that it truly can and will have an impact on the future,” the report concludes.
