Data and analytics provider Morningstar’s Voice of the Asset Owner Survey 2023 has found that 67% of owners believe ESG has become more material to investment policy in the past five years, with environmental factors driving materiality. The second annual survey’s quantitative phase received responses from 500 asset owners representing more than US$10.7 trillion in AUM. Key issues flagged by the asset owners were related to the market environment, regulatory confusion, and the need for improvements in ESG data, ratings, indexes and tools. However, the survey also found that despite “persistent implementation challenges”, ESG strategies allocations are increasing, with environmental issues – including those related to climate change and the transition to net zero – driving materiality. Earlier this year, the asset owner respondents to the qualitative phase of the survey were “adamant” that ESG considerations are a “financially relevant and material part of the investment process”. The asset owners also spotlighted the need for better ESG data and tools, with investors “concerned” about quality. Asset manager Schroders has also published its Institutional Investor Study 2023, with over half of the 770 investor respondents with US$34.7 trillion in AUM concerned about the impact of geopolitical uncertainty and inflation. This had led investors – both in public and private markets – to invest in companies with more localised supply chains. Additional findings of the report were 35% of respondents planning to increase allocations to private assets, around half of global investors believe that infrastructure/renewables are best placed to capture energy transition investment opportunities, and the majority of investors believe sustainability and impact strategies will support their objective of achieving long-term financial returns.