Schroders Poll: Sustainable Investing Remains A Challenge For Institutional Investors

Oct 11 2017 | 3:18pm ET

Sustainable investing continues to present a challenge to nearly four out of five institutional investors, according to a new survey from global investment manager Schroders, with performance concerns and a lack of transparency/data leading the way. 

Schroders polled some 500 institutions for its latest Global Institutional Investor Study, including surveyed a wide range of global pension funds, foundations, endowments and sovereign wealth funds. Key highlights:

  • 77% of survey respondents reported that investing sustainably remains a challenge.
  • Almost half (48%) say they’ve increased their allocation to this area over the past five years
  • Around a fifth of institutional investors both in North America (22%) and Asia (23%) say they do not allocate to sustainable investments. The compares to a global average of 17%.
  • 67% say sustainable investment will become more important over the next five years. This sentiment was strongest in Latin America and Europe with 85% and 84% of investors respectively in these regions sharing this opinion.
  • A greater number of institutional investors in North America feel sustainability should be a consideration when investing in alternatives, as compared to the global average (43% vs 29%).

Other highlights from the Schroders survey:

  • 44% and 41% of respondents, respectively, cite performance and lack of transparency/reported data as the greatest challenge to investing sustainably. Both metrics were highest among Asian respondents at 45% apiece.
  • Internally, the subject of sustainable investing seems accepted. Only 11% believe their investment committee is uncomfortable making sustainable investments. Globally, however, 20% of respondents flat out don’t believe in the concept.
  • Among investors characterized by Schroders as sustainability advocates, capital preservation is a much higher goal than for those defined as dismissive, 75% to 56%.

The survey was split among 115 institutions in North America, 200 in Europe, 150 in Asia and 35 in Latin America and sourced from 15 different countries, Schroders said.

London-based Schroders is a global asset management company with more than $543 billion in assets under management for major financial institutions, pension funds, governments, charities, high net worth individuals and retail investors, invested into a broad range of active strategies across equities, fixed income, multi-asset, alternatives and real estate.

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