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Real asset investors acknowledge ESG link with performance

Tianjin_solar_panelsInvestors in ‘real assets’ – an asset class including property – will increase their focus on environmental, social and governance (ESG) criteria, a report has found.

Over 90% of investors said they will incorporate more ESG factors over the next five years as they hunt for returns, according to Macquarie Infrastructure and Real Assets, which carried out the survey.

Nearly 80% of real asset investors acknowledged a positive correlation between ESG and investment performance – but a lack of in-house expertise could be a barrier, the research found.

Phil Peters, head of Macquarie Asset Management’s client solutions group, said: “Investors in the real asset sector have reached an inflexion point, with a growing consensus agreeing that sustainability strategies can be pursued whilst delivering value for investors and driving positive change in communities.”

During the previous five years, less than 60% of real asset investors increased their ESG focus, according to the study.

Although ESG is growing in popularity, less than a quarter of investors in the Americas and Asia have a dedicated ESG function. This compares to 72% for Europe, the Middle East and Africa and 71% in Australia.

“To harness this exciting opportunity, our industry needs to bridge the ESG skills gap and significantly improve measurement and reporting tools,” Peters said.

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