German institutional investors are buying into more sustainable funds, with 80% now implementing sustainability strategies, according to a survey by fund manager Union Investment.
Over 80% of the survey’s 166 respondents – responsible for several trillions of euros of assets – also anticipate “significant growth” in the volume of sustainable investments in the future.
According to the report, investor engagement is regarded as highly effective in promoting the sustainable transformation of the economy.
Alexander Schindler, member of Union Investment’s board of managing directors responsible for business with institutional clients says: “The fact that four fifths of institutional investors now include sustainability criteria in their investment decisions shows that the intense debate around sustainability and climate change has been effective.”
Investors in Germany were found to generally agree on one crucial point: The transformation towards a sustainable economy will shake up the existing order and entail new opportunities and risks for the capital markets, the report stated.
“Most investors are aware that sustainability has become an important investment dimension. After all, ESG criteria help investors to gain a clearer picture not only of the risks but also of the investment opportunities associated with sustainability,” Schindler said.
Three quarters of German institutional investors are also in favour of a CO2 price of €63 per tonne – more than double the price envisaged in current plans.
The findings of the report highlight the performance of ESG strategies throughout the crisis, stating that a sustainability-focused portfolio not only mitigated the impact of the losses in global equity markets, but even generated a positive overall performance.
“The underlying causes of this phenomenon are not exclusively related to sustainability factors. But there are clear indications that companies with a very sustainable business model are more resilient to crises,” added Schindler.
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