Investors split on ESG value in risk mitigation
Over two thirds of US institutional asset holders have said they either disagree or are unsure whether environmental, social and governance factors drive investment performance or mitigate risk, according to a survey by RBC Global Asset Management. Of the 90 respondents to the survey, 62% believed that divestment in fossil fuels is a long-term investment measure.

Many investors remain uncertain about the ability of ESG investing to drive investment performance and mitigate risk, said a survey by RBC Global Asset Management on Tuesday.

RBC GAM surveyed 90 U.S. institutional asset owners, wealth managers and defined benefit consultants in June.

Of the 90 respondents, 30% said environmental, social and governance factors drive alpha, while 37% said they do not, and the remaining 33% said they are unsure.

Additionally, only 33% of respondents said ESG investing helps mitigate portfolio risk, while 40% said it does not and 28% said they are not sure.

The survey also found that only 17% of investors are satisfied with the quality and amount of ESG information provided by companies. Forty-three percent said they were somewhat or completely dissatisfied with the information available and the remaining respondents said they were neither satisfied nor dissatisfied. Unsurprisingly, research and returns were cited as the top “stumbling blocks” to ESG consideration by asset owners, according to the survey.

Other findings from the survey include: