- Regulations are increasingly driving ESG integration, our fourth ESG Sentiment Survey finds
- We also explore the growing interest in biodiversity and carbon credits
- Respondents represent cUSD11.5 trillion in assets under management
The survey, conducted from 2 to 24 February 2023, had a sample size of 422 from professionals working in financial services across the globe, in roles related to ESG decision making. Respondents represented 390 institutions with cUSD11.5 trillion in assets under management.
Regulations: Their influence on ESG is growing and moving from acting as a gentle nudge on behaviour to more like a stronger push in some areas. It shows up as a steadily growing reason for funds to have an ESG strategy. And regulators are seen as the stakeholder with most responsibility for driving sustainability.
Asia is catching up in terms of ESG. Fund flows indicated a stronger interest in Asia.
Surprise 1: Of those that responded, two-fifths reported net inflows into their ESG strategies over 2022, much more so than those that reported net outflows. There was a balance between general inflows and ESG inflows which we see as showing that ESG is a significant part of fund inflows, rather than a driver of fund inflows.
Surprise 2: Only a tenth of respondents benchmarked their funds against an ESG index. There were three times as many that used a traditional index as a benchmark for their ESG strategies. Even more surprising was that many ESG strategies were not benchmarked at all, but rather, were absolute return funds.