Despite growing regulatory pressure, the majority of institutional investors globally have not embedded ESG criteria fully into their investment process.
More than half (52%) of institutional investors qualify as early stage ESG adopters, defined as those who focus on a negative and positive screenings with relatively low levels of engagement, according to a CoreData Research survey of 800 investors.
Only about a third of respondents qualify as ESG embedders, meaning those who include engagement, sustainability-themed investing and impact investing into their approach, CoreData Research shows.
European investors tend to have the highest levels of ESG investment, scoring 5.1 on a scale that ranks adopters up to 10. North America scores the lowest at 3.6. In the UK, pension fund trustees face increased pressure from the government to enhance their ESG reporting standards. In line with the revised EU shareholder rights directive, pension scheme trustees will have to publicise their policy on financially material ESG considerations and stewardship in October.
