ESG Unlocked: Europe out in front - Page 23

Sponsored by regard it as beneficial identified , for example , the clarity of definition and standardisation that regulation creates .
Those who saw it as a hindrance cited increased bureaucracy and cost as primary concerns . Some 73 % indicated support for regulations intended to achieve specific objectives – such as “ net zero emissions by 2050 ” – against only 10 % who opposed such regulation .
Asset owners consider greenwashing to be a real , though not overwhelming , concern : 61 % see it as a “ major ” or “ moderate ” problem , while 26 % say it is a “ minor problem ” and 11 % feel it is “ not a problem .” These results evidence asset owners ’ broadly favorable perspective on regulation ( see Chart 2 ).
Ratings , data and tools have improved , but asset owners are asking for more . A majority of respondents felt that ESG ratings , indexes , data , and tools have become either “ a lot ” ( 28 %) or “ somewhat ” better ( 35 %) over the past five years , while 13 % felt that they had become “ worse .” Over the next five years , asset owners expect improvements in quality , relevance , clarity and scope ( in that order ). These tools are seen as most useful for risk management and the measurement of impact .
When asked who is most responsible for improving ESG data , ratings and tools , asset owners cite a range of institutions including government , service providers ( ratings agencies , specialised data providers , index providers ), international standard setting bodies , markets and NGOs ; it requires a collective , acrossthe-board effort . With regulatory efforts to improved data disclosure and quality already underway , standard setting becoming more streamlined globally and service providers continually innovating , the public sector , private sector and NGOs are responding to calls for better quality , relevance , clarity and scope of data and analysis .
While the development of ESG is a global trend , there are many distinct aspects to this , and some local differences across the various regions . Many of the patterns described above held across all the regions surveyed , in some cases remarkably so . There were , however , a few areas where clear distinctions in
Chart 1 : How material is ESG to your total portfolio (%)
10 %
Not very material Fairly material Very material
Source : Voice of the Asset Owner - Key Findings
Chart 2 : How much of a problem is greenwashing in ESG ? (%)
11 %
Source : Voice of the Asset Owner - Key Findings
26 %
Not a problem Minor problem Moderate problem Major problem
philosophy or approach could be found . On the question about asset owners ’ overall approach , for example , the US was notable for having the greatest proportion of both the highest and the lowest responses , indicating a significant lack of consensus among asset owners . The motivations for pursuing ESG also varied , with external pressure a greater factor in North America than either Europe or Asia- Pacific . Regulation has been a particularly strong factor in driving ESG investing in China . Approaches to stewardship and engagement also varied , most likely due to differences in regulations and norms across and , to some extent , within regions .
To summarise , through discussions with asset owners of all shapes , sizes and approaches around the world , ESG investing is complex as well as diverse and is progressing at different speeds and
37 %
38 %
48 %
23 %
stages . Despite their differences and the fact that each is on a different stage in their own ESG journey , asset owners are quite unified in their ESG commitment . A prime example of this commitment is active stewardship . More than nine out of ten ( 91 %) of asset owners we surveyed report that active stewardship ( including proxy voting ) plays at least a slightly significant role in their ESG programme .
And it should not go without saying that asset owners can be quite influential to global markets and public policy when they get their minds focused on a topic . ESG is an ecosystem with multiple catalysts , influencers , stakeholders and spheres of influence . The global asset owner community is just one factor in this global ecosystem , but an important one .
the full quantitative analysis
ESG Unlocked : Sustainable Revolution In Full Swing October 2022 23