Contributors: Fraser Priestley, Head of Performance and Risk, EMEA, BNY Mellon and Marvin Vervaart, Asset Owner Segment Head, EMEA, BNY Mellon
A transformational shift is occurring as financial market participants, regulatory and industry bodies adopt a more proactive approach to ESG investing.
BNY Mellon’s new report reveals a secular shift in the adoption of sustainable investment practices amongst asset owners and asset managers that goes beyond prevailing value alignment techniques. End-investor demand, regulatory developments and a growing realization of the risks posed to portfolios by failing to account for the ESG impacts of investments are key drivers.
“ESG is becoming a pervasive consideration across asset owners’ investment strategies and asset managers’ product ranges.”
Measurability and comparability of non-financial performance are cited by financial market participants alike as the biggest hurdles to ESG investment growth. However, regulatory and industry bodies are mobilizing themselves to reduce these challenges by rolling out frameworks and proposals to establish common definitions for sustainable investment and to better define reporting practices.
“Inadequate information is the biggest challenge for adopting ESG principles.”
Acknowledging the defining shift towards ESG investing, the full report considers the next steps for carving a path toward a sustainable future for asset owners and asset managers, as the importance of the wider financial industry’s role in contributing to the preservation of our planet is made clear.
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