News

ESG reporting is 'biggest challenge' for investment managers

Challenges, ESG, reportingRussell Investments' latest ESG survey indicated that data limitations and non-standardised reporting frameworks constitute the biggest challenges for investment managers.

The eighth annual 'ESG Manager Survey' found that less than 30% of firms out of 236 can report on their respective portfolios' carbon-related metrics.

The survey findings disclosed that ESG reporting remains the most significant challenge despite increased expectations of adequate reporting, the firm said.

The study showed that 41% of respondents expressed they have ESG-related data for developed market sovereign bonds, while 27% have some scientific-based carbon data in this segment.

While for fixed-income firms, 20% have some form of ESG-related data in the securitised bond market, and "only" 8% have some form of carbon data in the respective segment.

Yoshie Phillips, head of fixed-income ESG investing at Russell Investments, said, "The results highlight further improvements are still needed around ESG data. In the corporate bonds space, there are still several challenges such as disclosure practices in privately held companies or applying carbon measures in green bonds."

Phillips further commented that outside of corporate issuers, ESG-related reporting continues to develop in an "unstructured fashion" due to the lack of unambiguous industry standards.

The survey revealed that asset managers are increasingly interested in energy transition as 26% of the respondents are signatories to the Net Zero Asset Managers initiatives, up from 10% in 2021.

Respondents of the survey identified climate risk as the most prevalent ESG issue among their clients (45%), up from 39% last year. At the same time, climate change/environmental issues stood as the top ESG concern for 68% of respondents' clients.

Findings show investors are more broadly focused on climate and environmental issues, and other ESG issues resonate less strongly, the asset manager claimed.

"This year's results reveal that the ESG journey is continuing at a markedly escalated pace, with regulators across the globe aggressively stepping in to try defining sustainable investing and to increase disclosure requirements, and asset managers trying to keep up," said Phillips.

Russell Investments' 2022 ESG Manager Survey was conducted across equity, fixed income, real assets and private markets asset managers around the globe.

© 2022 funds europe

Thought leadership

Euroclear_PM_white_paper_native_image_400x103

This whitepaper outlines key challenges impeding the growth of private markets and explores how technological innovation, when bolstered by the operational experience and global reach of FMIs, can provide solutions to unlock access to private market funds for a growing investor base.

DOWNLOAD NOW »
UBS_commodities_native_image_Nov_2023

Transporting goods by sea is the lowest carbon way of transporting goods. That said, the shipping sector contribute 3% of global carbon emissions, so we need it to get to net zero. Breakthrough technologies have the power to reshape the industry and drastically reduce its environmental footprint.

LEARN MORE »

Executive Video Interviews

Why fund admin tech is a key competitive advantage

Cian Hyland, Strategic Client Relationship Director at Deep Pool Financial Solutions spoke to us about how technology enables efficient data management, reporting automation and secure data access.

Insights from State Street

Cuan Coulter, Global Head of Asset Managers and Head of UK and Ireland at State Street, discusses how fund managers decide between the two cross-border fund domiciles, namely Ireland and Luxembourg, and why asset managers find managing data so difficult.

Unlocking access to private markets

Vincent Clause, who heads the global funds strategy at Euroclear and David Genn, CEO of Goji, sit down with Funds Europe to explain how technological innovation, bolstered by operational experience and global reach, can provide solutions that unlock access to private markets.

Sustainable investing in the DC world

Claire Felgate, a specialist in UK defined contribution pension schemes at asset manager BlackRock, talks with Funds Europe editor Nick Fitzpatrick about how - and the pace at which - DC pension schemes are adapting to the requirements of sustainable investment.

arrows

Webinars

Join our webinar for a deep dive into the findings of the fresh-off-the-press EU Taxonomy 2023 Insights Report, based on Clarity AI's best-in-class coverage of EU Taxonomy reported data and CDP industry-leading environmental datasets. 

In this webinar, we discuss tools for optimising fund data management and distribution, the role of global fund classifications and ratings, and how technology and automation enhance data integrity and insights.