ESG investment performance unavailable to 71% of investment managers

Over seven out of ten (71 per cent) portfolio managers are currently unable to view the performance attribution of environmental, social and governance (ESG) investment factors, RiskFirst has said.

Research conducted by the analytics company, which was acquired by Moody’s in 2019, showed that only around 15 per cent of portfolio managers had complete visibility of ESG factors for performance analysis.

Approximately a further 15 per cent of respondents said they could view ESG factors, but only on a limited basis.

The company claimed that the newly released survey results demonstrated the rising demand among investment managers for better visibility of drivers behind portfolio performance in real time.

RiskFirst US business development manager, Owais Rana, said: “Having a consistent, accurate—and customisable—view of performance of both ESG and traditional factors is crucial for investment managers, to help them identify their performance drivers. It’s all about enabling better insight to discover new opportunities and for clear performance communication with the end-investor.”

In February, research from CACEIS similarly found that more than two fifths (43 per cent) of trustees and pension managers didn’t feel equipped to monitor and report on environmental, social and governance (ESG) policy to a high standard.

RiskFirst CEO, Matthew Seymour, commented: “With seismic shifts in investor demand, coupled with rising regulatory pressure, investment managers must adapt to meet ESG preferences of their clients and regulators or risk being left behind.

“As an increasingly attractive investment option, the importance of having the right tools in place to understand both ESG and traditional factors cannot be overstated.”

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