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Most institutional investors use internal research and third-party sources to identify significant ESG risks, but don’t see ESG widely implemented in investment decisions, according to a Bank of America survey.
Of the participants, 80% said they do internal research and their priority is standardized company disclosure.
Over 80% believe that ESG helps improve investment risk management, doubling the rate of investors using ESG as part of their fiduciary duty. Yet two-thirds of respondents believe that less than 50% of global investors implement ESG in their investment process, and only one-third in private markets do.
In 2021, climate change, corporate governance and supply chains will be the top priorities, investors said, with 48% seeing ESG as a higher priority after COVID-19, with governance seen by 81% as the most important factor for risk management, while social issues like diversity and community engagement are less viewed by respondents.
More than 600 companies and institutional investors participated in the Global Themes in ESG conference from December 9 to 10, during which the survey was conducted.
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