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Lack of responsible opportunities will hinder ESG investing, survey finds

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Almost half (46%) of European professional investors say a lack of responsible investing (RI) opportunities will prevent the sector from becoming mainstream, according to a survey conducted by asset manager NN Investment Partners (NNIP).

The survey also reported that 44% of respondents felt there was a lack of research and information surrounding RI, while half believed that risk within RI was more difficult to manage than within traditional investments.

Jeroen Bos, head of specialised equities and responsible investing at NNIP, said: “It is worrying that still a relatively large number of investors feel there are too few opportunities to invest in a responsible manner and that there is seemingly still insufficient information with regards to these opportunities.”

Bos said the survey showed that asset managers needed to increase their efforts to improve the visibility of their responsible investing approach and expand the range of RI opportunities available to investors.

Managers also had to improve transparency when reporting environmental, social and governance (ESG) criteria, he said.

“The perception that applying ESG criteria results in a more limited investable universe could be one reason why half of our respondents believe that it is more difficult to manage investment risk than it is with more traditional solutions,” he said.

Bos argued that including ESG criteria in investment analysis actually improved risk management and formed a more complete approach to investing.

The study was carried out in May 2019 among 290 professional investors in five main countries – France, Germany, the Netherlands, Italy and Belgium – as well as a further panel with representatives from the UK and Scandinavia.

‘E’, ‘S’ or ‘G’ – what drives returns?

NNIP - The art of responsible investing

Source: NN Investment Partners’ Investor Sentiment: Responsible Investing Survey

Respondents were asked: “Do environmental, social or governance factors have the most potential to drive long term returns?”

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