Investors plan to invest more in the ‘S’ of ESG

About 73 percent of executives plan to increase ESG investment either significantly or moderately by the end of 2021, according to the MSCI Investor Survey, which surveyed about 200 executives at different asset owners by phone in September 2020.

As a result, approximately 36 percent more investors are putting greater emphasis on the “S” or social in ESG. Progress on ESG is held back, though, by concerns over fiduciary duty, perceived issues with data, cost and manager inexperience.

Among the investors making the change is the New York State Common Retirement Fund, the third largest U.S. public pension fund. The investor has pledged to shed any energy investments if they do not meet specific minimum standards as part of a pledge to move its portfolio to net-zero greenhouse gas emissions by 2040. It has been progressively shifting assets into sustainable investments, such as funds that track a low-emissions index. [This is an example of investing more in the “E”