ESG Momentum Continues
Momentum behind ESG continues to build, fueled by investor demand and a desire to make a tangible impact, says Jessica Ground, global head of environmental, social, and governance (ESG) at Capital Group. In a discussion on its ‘Global ESG Study,’ she says it shows institutional and wholesale investment professionals across Europe, North America, and Asia-Pacific awareness of ESG topics is not just increasing, it’s also broadening to cover a wider range of issues. The global cohort of ESG adopters rose to almost 90 per cent, up from 84 per cent in 2021. Non-adopters have fallen to 11 per cent, down from 16 per cent the previous year and just 13 per cent of global investors agree ESG is a passing fad and will go out of fashion. The study shows that the environment continued to dominate allocation decisions, however when asked whether social issues are being overlooked by this environmental focus, 41 per cent of investors agreed. The impact of the COVID-19 pandemic raised greater awareness on the importance of social issues such as safe working conditions, access to healthcare, and education. More recently, Russia’s invasion of Ukraine brought governance into sharper focus too. The number one challenge global investors cited in implementing ESG investments is with interpreting ESG data due to a lack of consistency between different ESG rating providers (25 per cent). This was closely followed by difficulties accessing ESG information and data and transparency of benchmark and index data.