Asset managers are most likely to incorporate environmental, social and governance (ESG) into their US equity and global equity strategies, research has found.
According to Boston-based consulting firm, Cerulli Associates, this is facilitated by the relative availability of ESG data for publicly traded stocks.
Mutual funds and ETFs are being used as wrappers for ESG strategies, with the ETF being increasingly popular for sustainability-themed products, the research found.
It also underscored the growing importance of ESG with 90% of asset managers saying they considered incorporating ESG capabilities into their investment processes.
Brendan Powers, senior analyst at Cerulli, said firms have a range of staff spread across portfolio management, research, due diligence, product development, and shareholder advocacy roles that consider their firms’ ESG capabilities.
Powers added: “More than 70% of managers report that they offer their clients ESG reporting. ESG reporting is a value-added service managers claim is important to the client relationship. Transparency is a common theme to those who value ESG issues. Clients expect managers to be transparent about their portfolio holdings in the same way managers seek transparency from the companies they invest in.”
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