Sustainable investments to double to 37% of AUM
While investors plan to double their allocations towards sustainable products over the next five years, the biggest barrier to adopting sustainable investing is data quality, according to a Blackrock survey.
The asset manager’s sustainable investing survey found 20% of its 425 respondents across 27 countries said the COVID-19 pandemic would accelerate their sustainable investing allocations. Respondents said they planned to double their sustainable assets in the next five years, rising from 18% of assets under management on average today to 37% by 2025.
Three-quarters of respondents said they used or would consider an integrated approach to account for environmental, social, and governance (ESG) risks in their portfolios.
Blackrock said overwhelmingly, 88% of respondents had placed climate-related risks at the top of their portfolio concerns to date.
Going forward, while climate was expected to remain the lead concern, a growing number of survey respondents (58%) said that concerns over social issues such as diversity and inclusion, and fair labour practices were expected to rise the most in the next three to five years.
However, institutional investors believed that data quality needed further focus as 53% cited concerns about “poor quality or availability of ESG data and analytics” as their biggest barrier to adopting sustainable investing, higher than any other barrier that was tested.
Blackrock chief client officer, Mark McCombe, said: “The tectonic shift we identified earlier this year has really taken hold, as the convergence of political and regulatory pressures, technological advancements and client preferences have pushed sustainability into the mainstream of investing.
“The results of our survey show this sustainable transition is occurring all around the world.”
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