Roughly nine in 10 (86 per cent) institutional investors with assets under management of US$10 billion or more say they’re incorporating sustainable investments as part of their overall investment strategy, according to a new survey by FTSE Russell.
The survey, which polled more than 300 asset owners across 15 counties, found the vast majority (90 per cent) of respondents said sustainable investments and environmental, social and governance regulations have helped them meet their sustainability goals so far in 2024, an increase from 75 per cent in 2023.
Two-thirds (66 per cent) of asset owners said they’re considering implementing sustainable investment considerations through passive strategies, while 61 per cent are thinking of an active stake.
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The impact from climate change events is changing the opinions of institutional investors about their exposure to sustainability. Indeed, 91 per cent of respondents said they’re somewhat or very concerned about the investment impact of climate risks, up from 84 per cent in 2023.
When asked about the biggest barriers to the increased adoption of sustainable investments, respondents cited concerns about sustainable investment methodology (39 per cent), a lack of resources to evaluate these investments (32 per cent) and concerns about taking on additional risk (26 per cent). Only 11 per cent of investors said regulation was a barrier for their adoption of sustainable investments, down from 29 per cent last year.
“As the pace of sustainable investment regulation continues, many more asset owners are investing in their resources and teams to navigate regulation,” said Stephanie Maier, global head of sustainable investment at FTSE Russell, in the report. “Asset owners also have growing confidence in sustainable investment thanks to better trust in data and fewer concerns around data quality and standardization.”
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