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Eight in 10 asset owners focused on sustainability: Survey

FTSE Russell's latest survey of global asset owners demonstrates an overwhelming consensus that sustainable investment is now standard.

FTSE Russell surveyed 179 global asset owners earlier this year, 19% of which were from the Asia Pacific region. Of those, 32% were from Australia or New Zealand.

The survey found 84% of asset owners are either implementing or evaluating sustainability into their portfolios. This is up from 53% in 2018.

Europe, the Middle East and Asia are the leaders in this regard, with a whopping 97% reporting as such, followed by the UK (90%) and APAC (88%).

In APAC, a further 6% said they're currently evaluating but the remaining 6% said they haven't made any moves on the sustainability front and don't intend to.

Equities is the most popular asset class when it comes to where APAC owners have implemented strategies at 44%, followed by fixed income and private equity (both 38%), infrastructure (35%), private real estate (29%), multi-asset (26%) and listed real estate (24%).

FTSE Russell also found that 82% of asset owners support sustainable investment regulation where it enables consistency of reporting, though 60% are concerned with inconsistencies in regulation across regions.

In APAC, 74% of respondents believe regulation could be both an enabler and a constraint, depending on the specifics. However, 17% said it would be a constraint.

Lack of standardisation in ESG data, scores and ratings was cited as one of the biggest barriers to sustainable investment adoption by 59% of respondents, and 45% said it is the quality of or consistency of corporate reporting and disclosures.

Interestingly, the study found that not allocating to sustainability-focused investments is perceived as a reputational risk, with 64% of APAC asset owners saying they do it to avoid damage. The same number of APAC respondents said mitigation of long-term investment risk is also a driver.

When asked which issues are a priority, 68% of those in APAC said climate and/or carbon. This was followed by broader environmental considerations, governance, social themes and ethical/faith-based considerations.

Among APAC respondents, 55% said they are most concerned with the investment impact of climate risk, while 38% said they're somewhat concerned and 7% said it's the least of their concerns.

Read more: FTSE Russell