35% of public pensions have a socially responsible investing component, compared to only 16% of corporates; portfolio screening still prevalent but shareholder advocacy on the rise
NEW YORK, October 2, 2012 — Public pension plans in the U.S. and Europe incorporate Socially Responsible Investing (SRI) and Environmental, Social and Governance (ESG) concepts into their portfolios at more than twice the rate of corporate plans, according to a new survey by BNY Mellon. The survey found that, overall, 24% of responding clients have implemented SRI/ESG strategies within their investment process, representing more than $200 billion in assets.
In early 2012 BNY Mellon surveyed its asset owner client base of more than 1,100 institutions as part of its on-going effort to understand and support client needs relative to SRI/ESG. The survey focused on if, how, and why clients incorporate an SRI approach into their investment process. Respondents were broken down by plan type – corporate pensions, public pensions, foundations & endowments – and segmented by size and region.
Socially responsible investing integrates environmental, social, governance and ethical issues into financial analysis and decision-making. In today's world, it goes beyond the narrow view of "negative screening" often associated with SRI and now includes more proactive practices such as impact investing, shareholder advocacy/activism, and community investing.
Highlights from the survey include:
"Our research suggests there may be a stronger link between public pension funds' investment strategies and their organizational values than exists with corporate pensions," said Greg Stewart, managing director of client solutions at BNY Mellon. "Interestingly, even the vast majority of those who see a performance trade-off between SRI and traditional strategies are still very likely to continue their SRI/ESG over the next two years, perhaps implying that values trump performance in this arena."
To view the full paper, Trends in Environmental, Social, and Governance Investing, please visit:
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