ESG investing is here to stay after Covid-19 but lack of robust data hinders adoption, survey shows
- There have been initiatives by many stock exchanges in Asia, including Hong Kong Exchanges and Clearing, to mandate ESG disclosure
- ‘Investors see ESG as the future and are in it for the long haul’ says Capital Group, which conducted the survey
Investments that take environmental, social and governance (ESG) factors into consideration are here to stay after getting a boost from Covid-19, but a lack of robust data could hinder their adoption by investors, according to a study from money manager Capital Group.
Three out of four investors disagree that interest in ESG will subside when the pandemic is over, according to the Capital Group ESG Global Study 2021 released on Thursday. The study was conducted on 1,040 global investors by market research consultancy CoreData Research in June.
“While Covid-19 has helped accelerate ESG fund flows, these findings show that investors do not think momentum will slow upon removal of the Covid-19 boost,” Capital Group said in the report. “Investors see ESG as the future and are in it for the long haul.”
However, nearly half [49 per cent] of the investors surveyed pointed to a lack of robust data as the top barrier to greater adoption of ESG.
“The lack of robust and consistent data is the main challenge when investing in ESG,” said Jessica Ground, Capital Group’s global head of ESG. “It’s understandable that as ESG becomes more important to these investors, the desire to be rigorous in their assessment of ESG grows.”
There have been initiatives by many stock exchanges in Asia, including Hong Kong, to mandate ESG disclosure, which has led to a rapid increase in data in the region, said Gabriel Wilson-Otto, director of sustainable investing at Fidelity International, speaking at a webinar hosted by the Asian Private Banker on Wednesday.