Survey of American institutional investors finds low take up of ESG criteria in investment decisions

9 April 2016

Editor

EU regulation

There is a low rate of adoption of environmental, social and governance (ESG) criteria in investment decisions among North American institutional investors according to a survey conducted by OFI Global Asset Management and Pensions & Investments.

The survey found that 77% of the 240 institutional investors questioned did not use ESG criteria in their investment decisions, 6% said they were used to a significant extent and 17% said they were used to some extent. The research found that of the institutions that employ ESG principles, 30% do so because they expect higher risk-adjusted returns on those investments while two-thirds do so because of policy mandates or because they view ESG as part of their fiduciary duty.

The authors of the report, Institutional Investors: Shared Expectations, Divergent Paths, said that while the findings could be interpreted as a general lack of interest among US and Canadian institutional investors in ESG, it may in fact be a sign that these investors are in the earliest stages of understanding and incorporating ESG principles in their investment decisions.

The results of this survey came as Canadian fund manager BMO Global Asset Management announced that it was joining Canada's Responsible Investment Association which promotes the integration of ESG factors into investment analysis and decision-making processes.

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