ESG Focus | Jun 25 2019
FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future:
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/
Responsible Investing Gaining Momentum
By Sarah Mills
-Impact investment on the rise, reports GIIN
-Corbin investor survey shows ESG growing in importance
-Investors' greatest frustration lack of quality data on small cap companies
Impact investing is continuing to rise according to the 2019 Annual Impact Survey from the Global Impact Investing Network (GIIN), both from new entrants and reinvestment of returns.
The survey also shows that impact investing is meeting or exceeding investor expectations.
Impact investing is the practice of directing funds towards projects, including greenfield projects, that have a positive impact on the environment and society.
This year, the survey posted its largest number of respondents, at 266, and its biggest dollar-value of assets under management, at $239bn.
GIINs more comprehensive Sizing the Impact Investing Market report published earlier this year and collated from publicly available data, estimates the total market to be $502bn.
The survey shows the majority of respondents’ investments met or exceeded their expectations for both impact (98%) and financial (91%) performance.
The eighty investors that responded to the survey every year between 2015 to 2019 recorded a compound annual growth rate of almost 17%.
“This year’s survey shows our industry is increasingly sophisticated,” says GIIN CEO and founder Amit Bouri, noting that after nine surveys, the hard evidence on impact investing is starting to emerge.
“We are starting to overcome challenges that used to stop conversations before they started, such as the misperception that financial trade-offs are necessary across all impact investment strategies. Fully one-third of survey respondents are motivated to make impact investments because of, not in spite of, their financial return potential."
Survey respondents included fund managers, foundations, banks, development finance institutions, family offices, pension funds and others.
Assets are allocated globally with roughly half invested in emerging markets.
Energy snared the largest share of the funding pie (15%), followed by microfinance (13%) and other financial services (11%).
Corbin investor surveys show “G” still king of ESG
Meanwhile, Corbin Research has surveyed 500 institutional investors and 100 investor-relations officers at top US companies to gauge investor approaches to Environmental Social and Governance (ESG) investing.
About 76% reported that ESG had become more prominent in their investment process over the past 10 years.
The majority of focus remains on the “G” for governance, with 73% reporting governance was important-to-critical in their decision-making process. This compared to only 30% for both environment and social investment factors.
Investors’ greatest frustration was the lack of quality data and access to data on ESG factors in the small-cap sector, with 48% identifying this as a problem.
Investors reported that ESG was just one input into their analysis; and said a low ESG score would not necessarily result in a sell decision.
FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future:
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/
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