Conclusion
One of the key themes that emerged from our 2020 survey of asset owners was the continued growth in sustainable investment and ESG. With nearly three quarters of asset owners either implementing or evaluating ESG considerations in their investment strategies, the incorporation of data on an issuer’s ESG performance into investment analysis has become mainstream.
Regional differences in ESG usage that were so pronounced in 2019 are also levelling off: EMEA continues to lead the way with its enthusiasm for applying ESG considerations to smart beta, though North America is catching up. This year 81% of EMEA asset owners evaluating or using smart beta expect to apply ESG considerations to smart beta (up from 73%), while 42% of North American asset owners do (up from 17%).
In terms of ESG smart beta implementation, asset owners increasingly embrace the use of ESG re-weighting over negative screens, positive selection or other approaches.
We will continue to include sustainability topics in future surveys to monitor how this confluence of trends takes shape and matures over time.
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