Responsible Investing Accelerates as Investment Merits Gain Traction

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90 % of institutional investors believe environmental, social and governance (ESG) integrated portfolios are likely to perform as well or better than non-ESG integrated portfolios, according to a new global survey by RBC Global Asset Management (RBC GAM).

The results reveal that adoption of responsible investing – including ESG integration, impact investing and engagement by asset owners – is growing steadily as the focus of institutional investors moves from “whether to” to “how to” implement a responsible investment approach.

There is a growing interest in applying ESG principles to diverse asset classes, including fixed income and infrastructure.

“This new data confirms that the majority of institutional investors and consultants have either adopted ESG principles or are actively looking at how to do so,” said Judy Cotte, Vice-President and Head of Corporate Governance and Responsible Investment at RBC Global Asset Management. “Importantly, many institutional asset owners now believe they have a duty to consider a responsible investing approach.”

Key findings from the survey include:

  • Performance has become a key selling point
  • Responsible investing is increasingly considered to be a fiduciary responsibility
  • Gender diversity on corporate boards continues to be important
  • ESG goes beyond equities
  • Exclusion screens vs. ESG integration and engagement
  • Negative screening