‘Social’ Sees Sharp Fall in Priority for Asset Owners  

Client demand is pushing asset owners to consider or implement sustainable investment strategies, with 52% citing this as the rationale, rising to 83% in Europe, the Middle East and Africa (EMEA), according to FTSE Russell’s annual Sustainable Investment Global Survey. However, the survey also found that only 29% of asset owners in the Asia Pacific region were facing this client demand. The report also found that following five years of steady growth there has been a directional dip in the level of asset owners globally that are implementing and evaluating sustainable investment – falling from 88% in 2022 to 80% this year. Further, fewer asset owners are considering or have implemented allocations to active sustainable funds this year compared to 2022, but more are allocating to passive funds. Governance is now the number one priority for asset owners in all markets – 54% in 2023 versus 33% in 2022. But social themes have fallen as a priority, dropping from 73% in 2022 to 37% in 2023. In EMEA, this had dropped from 65% to 40%. Data challenges were cited as the biggest barrier to sustainable investment adoption. FTSE Russell spoke to 350 asset owners with AUM between US$7.9 trillion and US$14.2 trillion between 27 March – 28 April, 2023.   

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