Stockholm (NordSIP) – ESG investing remains in good health, according to a new report commissioned by investment management solution provider SimCorp. The 2024 Global InvestOps Report is based on a survey of 200 investment industry executives carried out by Worldwide Business Research Insights (WBR Insights). The respondents are roughly equally split between asset managers, insurance companies, and pension funds with portfolio ranging in size from $10 billion to more than $500 billion. 40% of the investors are located in Europe, Middle East and Africa (EMEA), 40% in North America and 20% in the Asia Pacific region.
ESG investing was the standout category in terms of representing the greatest opportunity for technological innovation for the survey respondents. This was especially evident in North America, where 75% of respondents selected ESG investing as a priority, with a strong showing from European investors and to a lesser degree within APAC. The survey reveals that despite the perceived ESG backlash in the US, most investors are still seeking to improve their investment operations in that area.
April Wilcox, Director of Investment Services at CalSTRS said: “Last year, our board pledged to move the investment portfolio to net zero emissions by 2050 or sooner, and a goal of 50% by 2030. This pledge means defining, tracking, and reporting ESG data is a priority. I hear this as well with many of my peers trying to make big changes in ESG investing. Although these initiatives initially may disrupt operating models and add more work, once you establish a solid framework, you will be able to manage the ESG risk in your portfolio more effectively and efficiently.”
North American investors leading the way
89% of North American respondents plan to increase their exposure to, or begin investing in ESG asset classes in the coming 12-24 months. Despite ongoing attempts to politicise sustainability matters in the US, local investors appear to be taking a pragmatic approach and are continuing to build up their ESG capabilities. The picture is similar in EMEA, but APAC investors are somewhat lagging behind with a third of respondents having no plans to increase their ESG exposure in the near-term.
Commenting on the figures, SimCorp’s Head of Investments Hughes Chabanis said: “ESG tops the growth trend, with a significant percentage of respondents in all regions planning to increase their exposure to uphold sustainability goals. This includes North America where US investors have been known to lag behind their European and Asian counterparts. It is now more important than ever to view all your asset classes through an ESG lens.”
The study also points to a growing appetite from investors across all 3 regions for the integration of next-generation technologies within their asset management platforms. More than half of the respondents are considering implementing artificial intelligence and machine learning to help support their investment decision making process.
