Increased ESG adoption to continue, survey finds

A sustained shift in investment principles is driving the steady implementation of ESG among alternative asset managers and LPs, according to a joint survey by Adveq and the Chartered Alternative Investment Analyst Association.

71 percent of respondents said that the adoption of ESG principles in recent years will continue to be the largest driver of more firms and large LPs adopting an ESG approach.

The second largest driver of future adoption was LP pressure, and third was positive investment returns, according to the survey’s respondents.

78 percent believe ESG will be more important three years from now.

A large majority, 84 percent, of respondents said that responsible investment generally lacks clear industry standards, and 89 percent said better defined standards would help develop ESG approaches.

Difficulties in implementing an ESG approach were primarily driven by an absence of standardized, comparable data (69 percent); followed by the challenge of managing varied constituent requirements (44 percent).

“Responsible investing seems to be at a tipping point right now. It is garnering increased interest and momentum, which will likely accelerate in the years to come,” William Kelly, CAIA’s chief executive officer, said in a statement. “To support this demand, a more institutional infrastructure is needed including common standards, increased information and education.”