Almost two-thirds of UK fund managers are reducing their investments in companies that score poorly on diversity and inclusion (D&I) metrics, according to research.
The Edelman Investor Trust Survey which canvassed 600 investment professionals globally and 100 in the UK, found that 63% of UK managers are applying exclusionary screening based on D&I scores while a similar number (64%) are putting some of their portfolio companies on watchlists if they do not meet their D&I thresholds.
The report shows that firms globally see a greater correlation between companies’ robustness and their ESG credentials, partly as a result of the Covid-19 pandemic and a consequent shift in investment priorities.
According to the respondents, companies with higher ESG scores tend to perform better in a crisis and should be valued at a premium.
However, the report also suggests that there is a need for greater action among both UK companies and investors on ESG issues.
As many as 87% believe that profitable companies should be expected to take more responsibility on ESG issues than companies that are currently underperforming.
The same number of managers also think it is acceptable to wage public campaigns against companies in the current Covid climate and they expect activism to increase once the pandemic subsides.
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