Surveys show continued ESG support among investors globally

ESG investing remains strong globally among institutional investors, according to separate surveys released Wednesday by BNP Paribas and Barclays.

BNP Paribas surveyed 420 asset owners, managers, hedge funds and private equity firms between April and July 2023, with 50% in Europe, 28.6% in Asia Pacific and 21.4% in North America. Collectively, the asset owners have $51.2 trillion in assets under management.

BNP Paribas's fourth annual survey found increased commitment toward net zero in their organizations, with 41% calling it a priority, up from 18% in 2021, and 48% expecting it to be one within the next two years, up from 33% in 2021 considering it.

Impact investing also grew in importance, with 54% of respondents expecting to invest in such strategies in the next two years, compared with 45% now.

"Institutional investors have been transitioning from asking 'why' integrate ESG, to focusing on the 'how' of implementation," Sophie Devillers, head of sustainable finance, Securities Services, BNP Paribas, said in a news release.

Limited data quality continued to be the biggest barrier to ESG investing, with 71% of respondents calling it a significant barrier to greater adoption of ESG. That was particularly true for biodiversity data, with 66% of investors in the BNP Paribas survey reporting the need to do more to take account biodiversity loss or other environmental goals like water use, waste recycling and ecosystem protection.

Regulation and reputational risks were major drivers for 60% of survey respondents. The survey also found that 51% of respondents' organizations are integrating ESG expertise and data into portfolio management/investment decisions, while 42% have integrated ESG expertise and data into risk management.

The Barclays survey found continuing support for sustainable investing, particularly for addressing climate-related emissions, human rights and biodiversity. Its fourth annual ESG investor survey conducted in July and August polled 270 investors on several sustainability topics. Respondents included ESG specialists, portfolio managers and research analysts across the U.S., Europe and Asia.