Most investors say corporations are responsible for doing more than just making money for investors must also protect the environment and improve the community. according to a survey by Natixis Investment Managers.
Investors expect their advisors and fund managers to be part of the investment decisions and research surrounding investments that take environmental, social and governance issues into consideration, according to the survey.
Natixis Investment Managers surveyed 8,550 investors in 24 countries and found that the majority also want policy makers and the private sector to act more responsibly to improve the world.
Seventy-seven percent of the respondents to the survey said it is their responsibility as investors to hold companies accountable for their impact on society, including taking such diverse issues as climate change and inequality into account. Even more, 82%, said companies have a responsibility to address social issues, compared with 78% who said it is a government responsibility.
“As environmental, social and governance [standards] become more widely adopted and investors learn more about the different kinds of ESG investments, interest in ESG investing is growing rapidly, reinforced by positive returns from these strategies,” Nathalie Wallace, global head of sustainable investing at Natixis Investment Managers, said in a statement. “With governments, nongovernmental organizations and private companies all showing increased commitment to ESG goals, these strategies can enable investors to pursue superior environmental and social outcomes and the financial performance they expect.”
Natixis added that fund managers and financial advisors play important roles in driving sustainability and broader ESG adoption. The survey found that a majority of investors believe they have a responsibility to help solve social issues through their investments. Their commitment extends beyond personal responsibility to fund managers, whom they hold to the same standards of active engagement with investments. The survey found 55% believe fund managers also should sell their shares in companies with poor ESG records, and 74% expect their fund manager to engage with the companies they are invested with to influence both ESG and better business practices
Forty-one percent said they do not know enough about ESG investing, which suggests “that not only can advisors play an important role by educating clients about ESG, they can and should broaden these conversations with more clients,” Natixis Investment Managers said.
Natixis noted that conventional wisdom says ESG adoption has been driven by socially conscious millennials, but broad adoption and interest suggests ESG now appeals to the mainstream of investors. One in four millennials said they were invested in ESG, but so did 20% of those in Generation X and 18% of baby boomers.
ESG interest continues to grow and shows no signs of diminishing, according to Natixis. Total assets worldwide in ESG investment strategies topped $1.6 trillion in 2020. The survey found that 21% of individual investors currently employ ESG investing strategies. Of those, 24% invested in ESG for the first time in the past year, while 33% of those who were previously invested added to their existing holdings. Nearly half of those not yet invested in ESG said they are interested in learning more, the survey said.
Of the total number of participants, 45% said they consider it important to invest in companies that are transitioning to more sustainable business models, and 67% said they would be more inclined to invest in funds that demonstrate a better carbon footprint, which is a key factor in reducing climate change.