Most investment managers have an ESG policy and incorporate ESG throughout their investment platforms, according to Callan's inaugural 2023 Asset Manager ESG Study released Nov. 8.
Callan surveyed more than 1,200 managers of public and private asset classes around the world. Just over 80% were U.S. firms and 60% managed less than $10 billion, while 11% managed more than $100 billion as of March 31.
Not surprisingly, larger organizations spent more resources for environmental, social and governance metrics, the survey found. All companies managing $50 billion or more had a firmwide ESG policy, while 60% of smaller firms did.
Fewer than 50% of small firms have an accessible centralized ESG research portal while more than 70% of firms over $10 billion do. Also, 90% of large firms produce sustainability reports, compared to 20% of smaller firms. The 90/20 split was similar for the number of full-time employees dedicated to ESG.
The survey also showed differences among investment managers worldwide. While one-third of U.S. firms publish a sustainability report, more than 50% of firms in other countries provide such reports. Slightly over 50% of U.S. equity managers have proxy policies that address ESG, compared to more than 80% for those outside the U.S. And 50% of U.S. firms incorporate engagement on ESG matters into the investment process, compared to more than 75% of non-U.S. firms, the survey found.
By asset class, more than 70% of private equity managers worldwide reported engaging on ESG matters, compared to 55% for equity, 54% for fixed income and 58% for real estate managers.