Twenty-seven percent of North American institutional investors employ environmental, social and governance principles in their portfolios currently, said a recent survey report from Greenwich Associates.
Additionally, 61% of investors who do not currently incorporate ESG criteria say they are open to incorporating ESG principles in the future.
Among those who currently use ESG criteria, 52% adopted ESG principles within the past three years. That group primarily included public defined benefit plans and corporate defined benefit plans.
Also among current users, 50% said they consider ESG in the typical manager screening process — mostly at the finals stage, according to 45% of investors (another 27% said during the first manager screening, another 18% said only as a tie-breaker when needed and the remainder said "other").
Meanwhile, some 22% of investors who use ESG said it plays no role in the typical manager screening process, while another 28% said it depends on the search.
Greenwich surveyed 150 investment consultants and institutional investors in the U.S. and Canada, including pension funds, endowments and foundations, in May and June.