Is ESG investing going global? Is sustainability / ESG truly mainstreaming? A Bloomberg article (ref i) argues 2017 is the year ESG went global. There are some surface data supporting that. Ex, the amount of money flowing into “ESG” funds (ref ii), but other facts suggest we have ways to go. The article suggests 4 asset managers (AUM > $10,000,000,000,000 yes, that’s $10 trillion, est $1tn+ in equities) finally voting for a climate related proposal is positive.
Personal View: the counter is that it has taken until 2017 for 4 of the most significant asset managers in the world to vote for the FIRST TIME for such a proposal, + the voting record is behind the median industry view (which some argue is below where it should be).
I’m discouraged that these votes are so little + so late. That might sum up where we may be on climate (cf. Vaclav Smil on climate, ref iii).
If ESG is mainstreaming, then that doesn’t square with the lack of mainstream reporting of the largest RI/ESG investment conference (UN PRI). No mention in FT, WSJ or others. Very very few “mainstream” portfolio managers attending. Hmmm.
I often put myself in an optimistic camp. But, we have to be true. I remain uncertain if sustainability has gone mainstream. Links and more in comments.
Finally, investor surveys (ref iv) show 27% investors ignore ESG, 35% are unsystematic, thus only 35% systematically incorporate ESG. I’m unsure it counts as mainstream. I question what type of ESG participants define. One of the assets mngrs above states “Actingon material environmental, social and governance (ESG) opportunities or risks in our investments.” So it would self-define itself as integrate ESG. Some would argue its record on voting is not aligned to this. Other might want to know its engagement record.
H/T Gregory Elders, photo source via Bloomberg which sources Ceres
US SIF suggests $1tn to $4tn from 2012 to 2014 for US-dom funds with ESG tilt.
Note: Personal view. No organizational endorsement.