Alternative investors split on importance of ESG

Private equity investors were the most likely to consider environmental, social and governance issues into in their alternative investments compared to investors in other asset classes. Of the 177 investors surveyed by Preqin in its latest alternative assets update, 48% said they already have ESG policies in place, or plan to in the next 12 months. Investors in natural resource funds were the least enthusiastic about ESG with only 18% saying definitively that they consider such policies. Hedge fund investors were the most common to reply that they have no formal ESG considerations in place with no plans to do so in the future.

Preqin also looked in a broader scope, polling investors on attitudes toward making investment decisions based on ESG factors. Of those that responded, 52% said that ESG factors have never played a role in their decisions to not invest in a fund, with only 8% saying that they frequently avoid investments due to negative ESG issues. The remaining 40%, meanwhile, occasionally avoided funds based on negative ESG factors.