A CFA Institute global survey has found that investors are using more environmental social and corporate governance (ESG) factors in their investment process. The survey of 1,588 CFA members found that even though the percentage of respondents using ESG factors in their decision making was the same as a 2015 survey (73%), more ESG issues are being taken into account by respondents.
Governance was the issue most considered (67%) according to respondents, up from 64% in 2015. Environmental and social issues also saw increases in use by respondents of 4 and 5 points respectively.
ESG issues are taken into consideration by the majority (65%) to help manage investment risks. Respondents were split on whether they consider ESGs in investment analysis systematically (51%) and those who do on a case by case basis (45%).
Regionally the highest concentration of respondents considering ESG issues were from Europe, Middle East, and Africa (85%) closely followed by the Asia Pacific region (81%). The Americas was the region least likely to use ESG information as 32% do not.
Respondents who did not take ESG issues into consideration said the main reason was because of a lack of demand from clients and investors (47%). Although respondents would most likely reconsider ESG issues if there was demand from clients and investors, up to 66% compared to 57% in 2015.
However, 43% said that ESG issues are not material or adding any value, a dramatic increase from 35% in 2015. The majority (54%) do not receive any training on how to consider ESGs, and even though many would like training, 25% do not think it is necessary.
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By GlobalData