Many investors remain uncertain about the ability of ESG investing to drive investment performance and mitigate risk, said a survey by RBC Global Asset Management on Tuesday.
RBC GAM surveyed 90 U.S. institutional asset owners, wealth managers and defined benefit consultants in June.
Of the 90 respondents, 30% said environmental, social and governance factors drive alpha, while 37% said they do not, and the remaining 33% said they are unsure.
Additionally, only 33% of respondents said ESG investing helps mitigate portfolio risk, while 40% said it does not and 28% said they are not sure.
The survey also found that only 17% of investors are satisfied with the quality and amount of ESG information provided by companies. Forty-three percent said they were somewhat or completely dissatisfied with the information available and the remaining respondents said they were neither satisfied nor dissatisfied. Unsurprisingly, research and returns were cited as the top “stumbling blocks” to ESG consideration by asset owners, according to the survey.
Other findings from the survey include:
- The majority of respondents (52%) believe negative screening tactics are primarily used by mission-driven investors, and only 27% believe negative screening tactics impact alpha, “suggesting that for these investors, screening is a more philosophical decision than an alpha-driven one,” said a news release from RBC GAM on the survey results.
- 62% of respondents believe the fossil-fuel divestment movement is a lasting investment issue, while 22% said it’s a fad and the remaining 12% said it’s more than a fad.
- 60% believe proxy voting is a portfolio manager’s job, while 22% said proxy-advisory firms play an important role in proxy voting and 18% said asset owners should take up proxy voting directly.