ESG ETFs Could Find Support from Institutional Investors

A number of asset managers and asset owners already incorporate environmental, social and governance factors, and as the popularity of exchange traded funds continue to grow, more may turn to ESG-related ETF options to easily and efficiently access this targeted segment.

According to a recent survey conducted by BNP Paribas Securities Services, titled “Great Expectations: ESG – What’s next for asset owners and managers,”almost 80% of asset managers and asset owners use ESG factors in their decision making, and among those incorporating ESG, 46% plan to invest at least half of their assets in funds that incorporate ESG by 2019, reports Michael Katz for Chief Investment Officer.

“This represents a significant shift from today,” according to the report, “where for 45% of asset owners and for 40% of asset managers, 25% or less of their funds is either invested in or marketed as ESG/RI funds.”

Moreover, there is further potential for growth in North America as we are behind the curve when compared to the rest of the world. “North American institutions are behind their peers,” said BNP Paribas. The survey found that 84% of investors in the Asia-Pacific region and 82% of European investors incorporated ESG into their investment decision-making processes, compared to 70% for North American investors.