Dedicated ESG risk management teams are the main way that investment firms and asset owners integrate sustainability into their investment strategy, Funds Europe research finds. Over 60% of respondents in our survey said dedicated teams were used for ESG integration, while 35% said exclusion policies were used.
Stewardship and overlays were also common.
The preference for maintaining dedicated teams arguably shows how ESG risk management has developed into a discipline, our exclusive research – in partnership with custodian bank Caceis – says.
At the country level, there were some notable differences between respondents about whether ESG is seen as a risk management tool or a compliance issue. French, British and German respondents were most likely to view sustainability predominantly as a compliance issue. Dutch and Swiss respondents, meanwhile, were more likely to consider sustainability to be a risk management tool.
“These results show respondents have rightly identified ESG as a risk,” says Scott Foster, head of digital & governance products at Caceis. “Even though policies and strategies are being driven by regulators and government legislation, it is not a tick-box exercise. Asset allocators have identified that climate change holds various risks for their portfolio, including transition risks, decarbonisation risks and physical risks.”
*Read the latest from our ‘Reshaping Investment: Tokenisation, ETFs and Sustainability’ report here.
