Sustainable investing is now considered a standard part of the investment landscape, but international markets are still ahead of the North America, according to a survey of asset managers conducted by FTSE Russell, a global index, data and analytics provider.

Most asset managers (84%) now are either implementing or evaluating sustainability for their portfolios, FTSE Russell said. While risk used to be considered a drawback of sustainable investing, it is now considered a mitigating factor to long-term risk, the asset managers said. The survey, “2021 Sustainable Investing,” included 179 asset managers worldwide. In its fifth year, it is done annually to look at how sustainable investment is used and viewed by asset managers.

Adoption of sustainable investing is highest in Europe, the Middle East and Africa (EMEA), where 97% of asset managers have adopted it, which is an increase from 85% in 2020 and 72% in 2018. The figures for North America also show an increase from 39% in 2018 to 68% in 2021, the survey said.

“Sustainable investment is not a trend—it is now the market standard,” Jaakko Kooroshy, global head of sustainable investment research at FTSE Russell, said in a statement.

At the same time that managers are adopting sustainable investing, most (82%) feel regulation of the sector is a good thing, rather than a hindrance to its development. Asset managers said regulation enables the adoption of sustainable investment, while only 15% viewed regulation as exclusively constraining.

The participants said regulations can improve the quality and consistency of corporate reporting and disclosures, particularly in Europe, where sustainable investment strategies have been most widely implemented.

“With the rise of corporate ESG and climate-reporting requirements, asset owners said there are notable benefits to investors of improved reporting and standardisation, with 61% saying the development of corporate ESG and climate-reporting requirements are beneficial to their institutions’ investment approaches,” the survey said.

Asset managers who are implementing and evaluating sustainable investment are motivated by risk management, with 64% of all asset owners noting that mitigating long-term investment risk is a key factor. There is a correlation between size and a heightened focus on risk, the survey said. Seventy percent of respondents with assets under management of $1 billion or more cite this reason, compared with just 42% of asset owners with AUM of less than $1 billion.

Moreover, not allocating to sustainability-focused investments is perceived to come with a risk to institutional reputations, the survey said. Nearly half (49%) of asset managers in North America implement sustainable investment strategies to avoid harming their institution’s reputation, while 60% in EMEA countries and 64% in the Asia Pacific region do so for this reason.

The survey also noted that managers in different regions express diverging opinions on the impact of climate risk on investments. More than half of managers in the EMEA and Asia Pacific regions said they are very concerned about climate risk, compared to less than 30% in North America.

As the Covid-19 pandemic spread in mid-2020, interest in many social issues intensified. Of all asset managers, 60% said social themes, such as diversity and inclusion, human rights, customer responsibility and social impact, are now a priority focus.