Institutional investors are steadily integrating environmental, social and governance into their investment reporting and practices, according to a new report by the United Nations’ principles for responsible investment.

The report, which analyzed data from more than 1,800 investment organizations that have signed the PRI, found nearly all have formal, senior-level oversight and accountability for responsible investment. Nine in 10 (90 per cent) managers said this responsibility belongs to their C-suite staff, while two-fifths (43 per cent) said a dedicated department head is responsible for oversight duties. Another 45 per cent said they have a dedicated responsible investment team and nearly a quarter (23 per cent) said these duties are performed by external managers or service providers.

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Roughly 70 per cent of respondents said they have a stewardship policy — either a stand-alone document and/or part of a broader responsible investment policy — and the vast majority (85 per cent) said their overall approach to responsible investment is publicly available. Half of stewardship policies include escalation strategies, an element that becomes more common as assets under management increase. However, the report noted fewer than half of stewardship policies outline a specific approach to climate-related risks and opportunities.

Just a third (34 per cent) of investment organizations said they publish their policy on sustainability outcomes. More than 70 per cent said they don’t disclose how they deal with conflicts of interest related to responsible investments, while two-thirds said they don’t publish how they verify and report on their investments internally.

When it comes to providing ESG information in client reporting for the majority of AUM, 70 per cent of the largest organizations said they share qualitative ESG analysis and descriptive examples or case studies, while 65 per cent of the smallest organizations reported doing so. Fewer than half of all respondents said they include quantitative analysis or key performance indicators related to ESG performance, while just two in five said they provide clients with their stewardship results.

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