Institutional investors wanting to have a fully integrated environmental, social and governance framework for their investments are facing a lack of quality data and transparency, says research from State Street Global Investors (SSGI).
The paper is called The investment enlightenment: how to combine principle and pragmatism to achieve sustainable value through ESG.
A global study of 582 institutional investors found that out of the Asia-Pacific investors, about 60 per cent said it's possible to align material ESG issues and financial performance - 72 per cent already implement ESG factors into investment choices.
About 58 per cent of APAC and 65 per cent globally do not believe ESG results in lower returns. Eighty-seven per cent in APAC and 92 per cent globally want companies to be explicit about their ESG factors, in particular those factors that materially affect performance. It was noted that there is a lack of industry standards for measuring ESG performance, and it was a major barrier.
Asia Pacific investors are putting an increasing importance on sustainability and climate-risk during portfolio assessments, with more work to come.