Institutional investors are wanting more from their sustainable investments and asset managers. This is one of the results revealed in the Schroders Institutional Investor Study 2021 – spanning 750 institutional investors, collectively responsible for $26.8 trillion in assets.
This year’s results have highlighted that while Covid-19 has accelerated sustainable investing for institutions, sustainability still remains a challenge and measuring and quantifying the impact of investments has become a priority.
- 80 % find sustainable investing challenging
- 67 % cite integration as their preferred investment approach
- 64 % believe environmental issues are the most important engagement topic for asset managers
- 50 % identify greenwashing as the biggest challenge to investing sustainably
“Sustainable investing has grown significantly in recent years and the resulting attention from investors, regulators and asset managers has been inevitable. Added to the mix is the impact of Covid-19, which has affected all aspects of our lives with sustainable investing being no exception. The message from this year’s Institutional Investor Study is clear. Covid-19 has intensified the spotlight on sustainable investing, institutional investors need clarity on the goals and strategies fund managers employ and increasingly, many also want to know the impacts their investments deliver.” Andrew Howard, GLOBAL HEAD OF SUSTAINABLE INVESTMENT
COVID-19 & SUSTAINABILITY
Covid-19 has accelerated the importance of sustainability2020 was a truly transformative year. It fundamentally changed the way we live our lives but was also the year when we saw systematic change in how investors feel about sustainability. While we have consistently seen a growth in the uptake of sustainable investing since we began the Study in 2017, Covid-19 has accelerated this trend. This year, 52% of global institutional investors view the role of sustainable investing within their institution as more important because of Covid-19.
Inclusive approaches to implementing sustainability continue to be popular
When ranking in order of importance, integration and positive screening continue to be the preferred approach to implementing sustainable investing for global institutional investors, while negative screening remains less popular. This year’s results highlight that inclusive approaches are increasingly being viewed as an important aspect of driving change, rather than simply divesting.Investor attitudes are also becoming more specific, with growing demand for thematic investing and impact investing as they seek out specific environmental and social themes to make tangible impacts through the way they invest.
More information on the study including charts: Schroders Institutional Investor Study 2021