ESG remains a top priority for institutional investors as many see it as a part of their fiduciary duty, said results of a survey conducted by State Street Global Advisors.
A report based on the survey, which was conducted among more than 300 global institutional investors, reveals that 46% of respondents cited the need to meet fiduciary duty and regulations as a key driver for adopting ESG principles. Forty-six percent also cited ESG risk management for the portfolio as a major factor pushing the issue. Meanwhile, 44% cited seeking ESG risk mitigation as the primary motivator.
As for the main barriers to asset owners adopting ESG policies, 44% cited a lack of reliable and consistent data as being the top inhibitor, while 43% said cost issues were the main factor, and 40% said a lack of expertise in integrating ESG was the top issue.
"Despite the mix of drivers pushing and pulling investors to or from ESG investing, it has clearly reached a tipping point where institutional investors cannot afford to ignore it — either for the risk that it may pose or, perhaps even more compellingly, the opportunities it presents," SSGA's report said.
According to the survey, 95% of respondents intend to hire more ESG specialists within the next three years, while the remaining 5% plan to push their staff to be more knowledgeable on the subject.
In addition, when assessing money managers' ESG capabilities, 97% of investors cited the ability to measure ESG risk as "critical."