As anticipation builds for the United Nations Climate Change Conference in Dubai, Natixis Investment Managers has brought to light seven key trends in ESG and sustainable investing for 2023.
The analysis by Natixis IM highlights that 57% of institutional investors have adjusted their investment strategies due to the politicisation of ESG, with this impact more pronounced in Europe and Asia compared to North America. This trend underscores the varied global response to ESG and its integration into regional investment practices.
Moreover, ESG analysis is now seen as a fundamental part of sound investing, with 62% of investors acknowledging the potential for generating alpha through ESG investments. This shift marks a significant move towards integrating ESG considerations across all investment processes.
ESG investments are also expanding beyond traditional asset classes, with 41% of institutional investors focusing on ESG goals in bond holdings, including green bonds, and exploring opportunities in private equity.
Another critical finding is the driving force of individual investor demand in the adoption of ESG strategies by wealth management firms. This demand is shaping how fund selectors and private wealth managers globally include ESG investments in their client portfolios.
The analysis also reveals that the standardisation of ESG practices is making it easier for institutions to adopt sustainable investment practices, with 73% agreeing to this effect.
Diversity, Equity and Inclusion (DE&I) are increasingly a focus for institutional investors, with nearly half prioritising DE&I factors in their investment decisions.
Finally, institutional investors are recognising their role in the ESG equation. Aligning assets with organisational values and influencing corporate behaviour are key drivers for ESG implementation.
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