Survey Focuses on a Renewed Appetite for Impact

    Stockholm (NordSIP) – Asset owners polled on behalf of UK-based ESG analytics platform GaiaLens are struggling to put their increased social focus into practice.  200 institutional investors from the U.S. and Europe with assets worth USD 50.7 trillion were quizzed on the latest developments in their Environmental, Social and Governance (ESG) policies, against a backdrop of the COVID-19 pandemic and last autumn’s COP26 climate conference in Glasgow.

    Pandemic silver linings

    The majority of respondents indicated that the pandemic had spurred them on in their efforts to integrate ESG considerations throughout their investment activities.  There seems to have been a renewed interest in addressing social issues, with the impact of the pandemic having highlighted inequalities along income, racial and gender-based lines.  More than half the responses indicated an intention to include measurable ESG impact outcomes alongside return targets.

    A solid third of the asset owners surveyed pointed to Diversity and Inclusion (D&I) as a specific theme they would like to explore.  The difficulties faced by staff, customers and other stakeholders during COVID lockdowns seem to have prompted some corporate soul-searching.  GaiaLens’ poll shows that the pandemic has given a boost to the concept of the triple bottom line of people, planet and profits. Over 30% of the asset owners stated that they also have deepened their climate commitments over the past two years.

    A “come and get me” message to impact managers

    A consistent thread in the survey results is a mismatch between supply and demand.  Despite the large number of respondents wishing to expand their impact investing, only 7.5% of them had actually implemented such a strategy.  The D&I story is broadly similar, with just 13% of the asset owners feeling able to channel their investments into the right areas.

    This should be music to the ears of asset managers able to put together socially-focused investment vehicles of a scale and quality suitable for large institutional asset owners.  The GaiaLens survey would indicate that the demand is there, although the respondents also highlighted the need for EU taxonomy and Sustainable Finance Disclosure Regulation (SFDR) levels of ESG transparency to ensure managers do not resort to greenwashing in their desire to meet this demand.

    Improve emissions trading

    A significant proportion of respondents also want COP26 commitments to create a more consistent and efficient international carbon credit market to be put into effect sooner rather than later.  One message coming from the asset owners is that carbon pricing needs to rise significantly to reflect the true cost of Greenhouse Gas (GHG) emission to the planet.  This, along with better disclosure standards, was considered to have the greatest potential to improve institutional capital flows into climate change mitigation and resilience efforts.

    Image courtesy of Jonas Svidras from Pixabay
    Richard Tyszkiewicz
    Richard Tyszkiewicz
    Richard has over 30 years’ experience in the international investment industry. He has worked closely with major Nordic investors on consultancy projects, focusing on the evaluation of external asset managers. While doing so, Richard built up a strong practical understanding of the challenges faced by institutional investors seeking to integrate ESG into their portfolios. Richard has an MA degree in Management and Spanish from St Andrews University, and sustainability qualifications from Cambridge University, PRI and the CFA Institute.

    Latest Posts

    Partner content


    NordSIP Insights Handbook

    What else is new?