Investors want managers to help companies with ESG shortcomings

Integrating environmental, social and governance (ESG) considerations into fund managers’ investment processes has become commonplace. Evaluating companies on these factors now forms a vital part of the research done by investment managers, and those not meeting the standards set will be excluded from portfolios.

However, investors want fund managers to go one step further. Rather than just excluding companies that don’t meet the required standards, 51% of investors agree that fund managers should work with companies with ESG shortcomings to improve their ratings.

The desire for fund managers to work with companies was seen more strongly in Asia, with 59% of investors agreeing versus Europe where only 42% agreed. The Philippines was the country with the highest number of investors agreeing at 69% and Germany had the lowest at 29%.