Survey: ESG Becoming “Mainstream”, But Not Everyone Buying In

An overwhelming majority of CIOs believe environmental, social, and governance (ESG) risks should be priced into investments – but a majority also believe that a greater focus on ESG issues won’t lead to the maximization of retirement income.

The insights come from a survey of over 100 institutional investors conducted by Hermes Investment Management.

More details on the results, from ai-cio.com:

A new survey by Hermes Investment Management found that 90% of respondents believed fund managers should price in corporate governance risks as a core part of their investment analysis.

Despite this show of ESG awareness, 47% still said pension funds should focus exclusively on maximizing retirement incomes—a goal the majority believed would not be met by focusing on ESG issues.

Just 46% believed ESG-focused investing would produce better long-term returns.

Additionally, while 79% considered significant ESG risks with financial implications as sufficient reasons to reject an otherwise attractive investment, 58% believed the number of opportunities rejected by pension schemes because of ESG will increase only slightly over the next five years.

“It is clear that ESG has become mainstream,” said Hermes Chief Executive Saker Nusseibeh. “However, the industry’s obsessive focus on measurement leads naturally to more short-term thinking and decisions that often miss the whole point of investment.”

Read the full survey here.

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