LCP: Nearly a third of investment managers still not considering ESG factors for all asset classes

9 January 2020

LCP publishes on its website:

“The latest Responsible Investment survey from pensions advisory firm LCP reports that, although the majority of investment managers claim to be committed to investing responsibly, there is still significant room for improvement when it comes to ESG investment considerations. LCP urges investors to engage with their investment managers and challenge them over their ESG approach if what they see doesn’t match up to the managers’ marketing messages.

Evidence shows that investing responsibly will lead to better financial outcomes. Over eight out of ten investment managers who responded to our survey (85%) reported that they integrate ESG factors with the aim of improving long-term investment outcomes for their clients, whilst two-thirds (67%) said they believe ESG risks and opportunities can affect risk-adjusted returns over the short to medium term.

The number of investment managers who are not committed to systematically considering environmental, social and governance (ESG) factors as part of their investment process across all asset classes remains significant at 30%, according to the 2020 edition of LCP’s Responsible Investment survey.

Actions to address climate-related risks have remained surprisingly weak, despite them being a focus for regulators and policymakers. Of five specific actions that can be taken to manage climate-related risks, investment managers said they undertake, on average, just 1.7 per asset class. In 14% of cases, climate-related risks are not considered at all.

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