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Alternative investors demand ESG ability

ESGNearly half of investors in alternative asset classes have excluded working with fund managers who were not primed for responsible investments.

A survey of over 200 investors found 47% had excluded fund managers on the grounds of environmental, social and governance (ESG) investing criteria.

The LGT Capital survey, which considered the impact of UK Sustainable Development Goals (SDGs) on the alternative investment industry, found over 50% of respondents said ESG was important to investment decision-making.

More than 90% of the investors said SDGs would help the financial industry address urgent environmental and social issues and a quarter of respondents already integrated SDGs into their investment activities in some way. A further 40% planned to do so in the coming two years.

Tycho Sneyers, managing partner at LGT Capital, said: “Investors are increasingly turning to the SDGs to make their ESG and sustainable investment activities more outcome-oriented.

“The SDGs broaden the ESG scope from risk management to value creation in financial, natural and social capital.”

Other research findings were that nearly 90% of respondents felt SDGs would create new investment opportunities and over 80% said integration of ESG factors into investment decision-making would either have a neutral or positive effect on risk-adjusted returns.

On a wider scale, the research showed that investors favoured SDGs that can be linked to particular investment opportunities, like clean water, health, and education.

Climate action, as well as affordable and clean energy, came in as the top SDGs for investors when addressing their investment frameworks.

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