While there’s never been more interest in ESG, there’s also a backlash in some circles against ESG incorporation, Mr. Shingler said during the webinar, referring to anti-ESG policies enacted in different states.
Curiously, 6% of the 109 institutional investors surveyed said they did not know whether they incorporated ESG factors, a reflection of the “overall debate about ESG that we see in the United States,” Mr. Shingler said.
Institutional investors unsure about whether they incorporated ESG factors may not have made decisions to document a policy about ESG integration in their investment policies or they may not have made decisions about how they wish to implement it by asset class, Mr. Shingler said.
The survey found that among respondents that had not incorporated ESG into their investment decisions, 20% were considering doing so, down from 40% in 2021 and 33% in 2020.
Half of the investors that incorporated ESG cited fiduciary responsibility as a top reason, saying ESG incorporation can either reduce risk and/or enhance returns. Almost half of those that did not incorporate ESG, 47%, took the opposite view, saying the benefits of ESG incorporation were unproven or unclear. One-quarter of the non-ESG adopters feared that ESG incorporation would result in a breach of their fiduciary duty.