Inconsistent ESG data holding back effective adoption

ESG/ssga/State-Street-Global-Advisors/risk-management/

14 November 2019
| By Chris Dastoor |
image
image image
expand image

Lack of consistent environmental, social and governance (ESG) data as well as the talent to manage ESG integration are among the ‘pull’ factors that inhibited effective ESG adoption, according to research from State Street Global Advisors (SSGA).

The research entitled Into the Mainstream: ESG at the Tipping Point identified key ‘push’ and ‘pull’ factors for ESG policy adoption across 300 institutional investors globally.

Top pull factors that inhibited ESG adoption included the lack of reliable and consistent ESG data, followed by resourcing or cost issues from internal integration, infrastructure, knowledge-building and a lack of available ESG talent to manage integration.

The main deterrent cited was the unreliability and inconsistency of ESG data, with 44% saying that data challenges was a primary concern, with pension funds being the most likely to cite this as a top concern with 47% having said so.

However, 69% of sovereign wealth funds viewed internal resource costs as a deterrent, which indicated partnership opportunities to collaborate with asset managers on ESG planning.

Top push factors that drove ESG adoption included a need to meet fiduciary duty and regulations, as well as ESG risk management for the portfolio, with each cited as top push factors by 46% of respondents.

Rakhi Kumar, head of ESG investments and asset stewardship at SSGA, said fiduciary duty was now a major driver of ESG, alongside regulation.

“That fiduciary duty was cited so highly marks a significant development since many investors previously struggled with whether ESG adoption runs contrary to their fiduciary objectives,” Kumar said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months 1 week ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 2 weeks ago

The RBA has handed down its much-anticipated rate decision, following widespread expectations of a close call....

4 days 4 hours ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

2 weeks 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

4 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5