Sharp increase in ESG integration expected

bnp-paribas/

15 September 2021
| By Liam Cormican |
image
image image
expand image

One-in-five Australian investors believe environmental, social, and governance (ESG) will become a necessity to almost everything they do in two years’ time, according to a BNP Paribas survey.

BNP Paribas conducted a global survey of 356 asset owners and managers with an estimated $15.4 trillion in assets under management about their attitudes to ESG compared to two years ago and found an increased sophistication in ESG implementation.

Globally, four-in-10 survey participants said ESG would become integral to their investment process in the next two years, compared to only 8% in 2019.

Head of investment solutions at BNP Paribas Securities Services Asia Pacific, Nadim Jouhid, said investors were changing focus from relying on negative screening to wider ESG integration into their investment process and risk management decisions.

But the survey also showed 68% of Australian investors were concerned about conflicting ESG ratings or indices, in line with the global average.

The survey showed 38% of APAC participants were exploring net zero investment options and 21% had a company-wide commitment, which put APEC on the forefront of carbon neutrality ambitions compared to the global average.

Australia was slightly behind APAC in signing up to net zero ambitions by 2050, but 40% of those who had signed up wanted to achieve net zero 20 years earlier than expected.  

China and Singapore cited reputation as the strongest driver of ESG integration, making up 91% and 76% of their respective lists.

However, in Australia, external stakeholder requirements led with 68% of investors while reputation ranked fourth.

When asset classes were broken down, investors in Australia showed a stronger propensity to use ESG within real estate with retail making up more than half of ESG assets compared to the global average of 35%.

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....

3 days 5 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 4 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 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