Traditional obstacles to responsible investing are fading, State Street research suggests, which includes the belief that fiduciary duty does not allow for non-standard investment decisions.
State Street carried out research into environmental, social and governance (ESG) investing among over 1,300 institutional and retail investors.
Among the main findings were:
- Just 10% of survey respondents say they viewed fiduciary duty as a barrier to ESG integration
- 44% of asset owners and asset managers agreed that the concept of fiduciary duty is shifting towards encouraging ESG integration
- 35% of institutional investors believed ESG equals lower returns
- Nearly three quarters of investors said three-plus years was a realistic timeframe to gain outperformance from ESG investments
However, the firm says one significant barrier did remain, which was the lack of transparent, standardised and quality data.
The research found that 60% of respondents said a lack of industry standards for measuring ESG performance was a significant barrier to full integration.
State Street said it is expanding its ESG solutions across the organisation, including the introduction of a suite of ESG analytics tools and “enhanced asset safekeeping using data-driven insights”.
“Over the long-term, [ESG] issues can have a material impact on a company’s ability to generate returns,” said Ron O’Hanley, president and chief executive officer at State Street Global Advisors. “Investors, especially those with a fiduciary role, must consider what the world looks like today, tomorrow and beyond. “
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