ESG Indicators Increasing — New Study

More than 40% of U.S. asset owners have incorporated environmental, social and governance factors into their investment decisions, up from 37% in 2017 and 22% in 2013, said Callan’s annual ESG survey report, released Wednesday.

The 43% of respondents reporting they have incorporated ESG factors is the highest level in the survey’s six-year history.

On the flip side, 54% of respondents said they do not incorporate ESG factors and 3% said they were unsure, the 2018 survey found.

Among the survey’s respondents, foundations continue to be the highest adopters of ESG investing by plan type. In 2018, 64% of foundations reported incorporating ESG investing, up from 56% in 2017, followed by endowments at 56% (vs. 39% in 2017); public plans, 39% (up from 35%); and corporate plans, 20% (down from 25%). Foundations have been the highest adopters of ESG investing in four out of the six years the survey has been conducted.

Large plans, those with more than $20 billion in assets, continue to be the highest ESG adopters by plan size. In 2018, 72% of the largest plans reported incorporating ESG factors, down from 78% in 2017, but up from 33% in 2013, the first year the survey was conducted. That compares to 47% of funds with less than $500 million that said they incorporated ESG factors, up from 30% in 2017 and 20% in 2013.

This year’s survey also found that 40% of public and corporate defined benefit plans reported incorporating ESG investing, compared to only 13% of defined contribution plans.

Source: Pensions & Investments

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