ESG is more than a fad. Results from our 2019 ESG survey indicate that ESG is becoming more mainstream. Respondents from diverse industry groups and investment styles are reporting an increased prevalence on ESG factors when it comes to investment decision making. Unsure what this means for your organization? Clermont Partners is here to help.  

Highlights from the Study

  • The investment styles of the nearly 200 investors that completed the survey were 47% GARP, 37% growth, 41% value and 6% deep value*
  • More than two-thirds of respondents focus on ESG factors when making an investment decision
  • 13% of respondents manage a fund that is considered ESG-dedicated
  • Client demand and changing client preferences are primary drivers of the increased importance of ESG factors
  • 47% of respondents said they use Corporate Sustainability Reports in their ESG analysis, while 43% of respondents obtain ESG information from Annual Reports*
  • Investors want to see ESG data updated more often and will often ask ESG-related questions in one-on-one meetings
  • Corporate governance is the top ESG factor respondents consider when making an investment
  • 40% of respondents said they use MSCI ratings, more than ISS (32%) and Sustainalytics (23%)*
  • SASB and ESG frameworks are not universally followed or adopted – 95% of respondents said they do not follow SASB (Sustainability Accounting Standards Board) and 35% follow no formal sustainability frameworks

More Than Two-Thirds of Respondents Focus on ESG Factors

67% of respondents consider ESG factors when making an investment decision, up from 47% a year ago.

Are ESG factors considered when making an investment decision?

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ESG is Increasingly Growing in Market Emphasis

43% of respondents say ESG factors are becoming more prevalent in the market, up from 38% a year ago.

In the past two years, to what degree has the importance of any of the topics related to ESG changed in terms of your firm’s decision-making process?

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Client Demand Remains a Primary Driver of Increased Importance of ESG Factors

What is the key driver for the increased importance of ESG factors in terms of your firm’s investment strategy?*

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Investors are Most Interested in Seeing ESG Communications Integrated into Investor Presentations

What investor communications could be improved with the addition of ESG topics?*

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Investors are Almost as Likely to get ESG Information from Annual Reports as Sustainability Reports

How do you get the most helpful information from an issuer on your ESG screening?*

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Investors are Increasingly Looking for More Timely Updates / ESG Information

How do you get the most helpful information from an issuer on your ESG screening?*

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Investors find the most helpful sources of ESG information to be direct questions in one-on-one meetings, followed by corporate sustainability reports and corporate websites.

The E, the S and the G

Investors are Split on the Importance of the “E” Factors

How important are E, S and G factors in making an investment?

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Corporate Governance Remains the Top ESG Concerns

Do any of the following factors influence your investment decision making process?*

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Other Risk-Based Factors are Concerns to Investors

The top ESG factor respondents consider when making an investment is corporate governance followed by cybersecurity, executive compensation and supply chain risk.

*Reflects highest ranked factor