Featured article: Asset owners remain positive about sustainable investment
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Asset owners remain positive about sustainable investment
FTSE Russell’s 8th?Annual Sustainable Investment Asset Owner survey 2024
While asset owner’s objectives, priorities and concerns may vary, our survey provides key findings that highlight asset owners are increasingly upbeat about sustainable investment data and regulation. For the first time they are implementing sustainable investment more often through passive than active investment strategies. This is an important shift in the market and demonstrates more confidence in passive sustainable investment strategies. These elements combined are helping many institutions to make robust long-term investment decisions that will deliver value to their beneficiaries going forward.
The asset owner community continues to treat sustainable investment as a core component of investment strategies even in the face of macroeconomic headwinds. Larger asset owners are leading the implementation of sustainable investment considerations across their investment portfolios. Asset owners at the smaller end of the AUM spectrum are implementing less, leading to what we infer to be a directional dip for all respondents worldwide. That said, we do not believe this one-year drop in momentum among the smaller asset owners will impact the long-term trend of growing scale and sophistication of sustainable investment, documented by our annual survey over the last eight years. Despite a high level of sustainable investment consideration in investments, asset owners state it is challenging to align portfolios in accordance with sustainable investment and climate guidance. As an index provider, we play a crucial role in providing solutions, data and insights, allowing us to partner effectively with the financial market.
As the global scientific community provide increasingly stark warnings on the impact of climate change on the global economy, asset owners are understandably concerned about the impact of climate risk on their investments. This is demonstrated by the high proportion of asset owners (91%) stating their concerns, which is the highest level we have recorded. However, the concerns identified last year on ESG regulation have now substantially subsided. As the pace of sustainable investment regulation continues, many more asset owners are investing in their resources and teams to navigate regulation.
Asset owners also have growing confidence in sustainable investment thanks to better trust in data and fewer concerns around data quality and standardisation.
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