More investors are engaging markets with environmental and socially responsible investing methods and products—and fewer investors are rejecting ESG methodologies outright, according to a survey released this week.
Thirty-four percent of the U.S. respondents in a survey of investment decision makers now reject ESG investments outright, compared to 51 percent in 2017, according to “Charting a Sustainable Advantage: The 2018 Responsible Investing Survey” by RBC Global Asset Management,.
ESG investing is beginning to clear an important psychological hurdle as well, with 24 percent of U.S. investors now believing that ESG-integrated portfolios will outperform non-ESG portfolios, up from 5 percent of U.S. respondents in 2017.
Worldwide, 38 percent of the survey’s respondents believe that ESG is a potential source of alpha, an increase from 24 percent in the 2017 version of the survey.
Globally, 72 percent of investors in the survey are now using ESG methods or screens to make investment decisions.
Half of the investors surveyed globally believe that ESG investing is part of their fiduciary duty, double the percentage that said the same last year.
The survey also uncovered further evidence that ESG methodologies are migrating from equities into other asset classes. Three-fifths of the global respondents now incorporate ESG into their fixed-income portfolios, more than two-fifths apply ESG to real estate, and more than one-third apply ESG in infrastructure and alternative assets.
RBC surveyed 542 participants from around the world. The business segments most represented among the respondents include pension plan sponsors, 15 percent; consulting organizations, 12 percent; foundations and non-profits, 11 percent; governmental organizations, 8 percent; and wealth managers, 8 percent.