ESG advocates have long talked up the benefits of ESG investing for performance, but a new survey offers a “reality check”, according to one of its authors. Tom Gosling, an executive fellow at London Business School, and researchers Alex Edmans and Dirk Jentner, surveyed more than 500 portfolio managers about their beliefs and objectives when it came to environmental and social (ES) topics.

They found that even when they are running dedicated sustainability strategies, the portfolio managers don’t consider ES issues to be key drivers of performance. ESG sceptics may be tempted to jump on the findings, but they would be throwing the baby out with the bathwater.

As Ari Polychronopoulos, Research Affiliates’ head of ESG, told IPE, considering environmental and social issues is still important, but as part of a portfolio construction approach known to enhance returns.

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Findings of a recent study offer a “reality check” about the progress and importance of sustainability within financial decision making

In other news, a new global taskforce has been launched to develop a disclosure framework focussed on the financial risks posed by social issues, including inequality.

The intention is for the co-chairs of the Taskforce on Inequality and Social-related Financial Disclosures (TISFD) to work with the steering committee to create a disclosure framework that is market-usable, aligned with international standards on business conduct, and integrated with reporting standards.

The Dutch pensions regulator is proposing amending ESG reporting templates to require the country’s pension funds to report annually about the progress they make in meeting their CO2 reduction targets, in addition to providing more insight into their sustainable investments, such as the percentage of green investments.

Last but not least, in the latest sign that expectations for the asset management community are evolving, the head of the Net Zero Asset Owner Alliance (NZAOA) has said it is not necessary for investment managers to have net zero commitments.

Günther Thallinger, a board member at Allianz and chair of NZAOA, told IPE that it was “really understandable” that asset managers wanted to provide different services to different clients, some of whom are not seeking to align with a low-carbon economy.

Net zero was an asset owner story, he said, with asset owners needing to take more responsibility for their climate impact.

Items to note:

Susanna Rust

ESG editor

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Susanna is deputy news editor at IPE. At IPE she covers responsible investment and EU regulation, but also enjoys reporting on developments in and around the UK pensions industry. Having been a financial journalist since 2008, Susanna started her career as a corporate governance/corporate social responsibility analyst at proxy advisory firm PIRC.View full Profile

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