Sustainable investing remains a challenge for over three-quarters (77%) of institutional investors across the globe, even though a majority realise the growing significance of the approach, according to a study by British fund manager Schroders.
The Schroders Institutional Investor Study found performance concerns as a major impediment to sustainable investing, with 41% of investors citing the factor as a challenge. Other challenges to this approach cited by investors include lack of transparency and reported data, as well as difficulty of measuring and managing risk.
In Asia, 82% of asset owners reported challenges in adopting this approach, while 69% of investors in the US did the same.
Across the globe, 67% of investors said that they expected sustainable investing to grow in importance over the next five years. The view was shared by 85% of investors in Latin America and 59% of Asian investors.
Globally, 20% of investors said that they do not believe in sustainable investing. The opinion was reiterated by 29% of investors in Latin America. Europe ranked as the least sceptical region in this regard, with only 15% saying echoing the view.
Schroders global head of stewardship Jessica Ground said: “The evidence is increasingly clear that investing sustainably leads to better long-term outcomes for institutional investors. Therefore it is important investors face little or, better still, no challenges when it comes to adopting this approach.
“For example risk concerns should if anything be lower for a sustainable investment approach, as they are taking a forward-looking approach to significant risks such as climate change which simply aren’t captured by traditional risk measures.”