Sustainable investing remains a challenge for over three-quarters (77%) of institutional investors across the globe, even though a majority realise the growing significance of the approach, according to a study by British fund manager Schroders.
The Schroders Institutional Investor Study found performance concerns as a major impediment to sustainable investing, with 41% of investors citing the factor as a challenge. Other challenges to this approach cited by investors include lack of transparency and reported data, as well as difficulty of measuring and managing risk.
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In Asia, 82% of asset owners reported challenges in adopting this approach, while 69% of investors in the US did the same.
Across the globe, 67% of investors said that they expected sustainable investing to grow in importance over the next five years. The view was shared by 85% of investors in Latin America and 59% of Asian investors.
Globally, 20% of investors said that they do not believe in sustainable investing. The opinion was reiterated by 29% of investors in Latin America. Europe ranked as the least sceptical region in this regard, with only 15% saying echoing the view.
Schroders global head of stewardship Jessica Ground said: “The evidence is increasingly clear that investing sustainably leads to better long-term outcomes for institutional investors. Therefore it is important investors face little or, better still, no challenges when it comes to adopting this approach.
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By GlobalData“For example risk concerns should if anything be lower for a sustainable investment approach, as they are taking a forward-looking approach to significant risks such as climate change which simply aren’t captured by traditional risk measures.”
