SUSTAINABLE INVESTMENT SURVEY 2022
a little less conversation, a little more action, please
A global crisis demanding global action
This year’s heatwaves, wildfires and droughts have only reinforced what experts have been telling us for some time now: climate change is a very real threat. Alongside the climate crisis, this year has thrown at us a seemingly endless stream of economic, political and social challenges, affecting communities across the globe and adding to the factors asset owners must consider when investing.
At Redington, we take our role in helping to protect people and planet seriously – it’s central to our mission. Our annual Sustainable Investment (SI) Survey is one way we hope to achieve this.
Please read the survey, participate in the content and polls, and help us. Together with our clients, partners, and industry peers, we hope to spark the large-scale action needed to solve the sustainability challenges we face.
questions asked
asset managers surveyed
representing £37.7tn AUM
covering 232 strategies
This year’s survey
This year we asked over 200 questions to 122 asset managers, covering 232 strategies. These managers operate across a wide range of asset classes and are based around the globe, providing a well-rounded view of the asset management industry in 2022.
Press ‘play’ to hear Nick Samuels, our Head of Manager Research, explain more about this year’s Sustainable Investment Survey: who we surveyed, what we asked, and why.
ESG Integration
%
98% of asset managers have an ESG policy
%
but this only covers 80% of strategies
%
62% of asset managers have aligned remuneration policies with SI metrics
It’s clear that the majority of asset managers recognise the value of incorporating ESG factors into the investment process. From those surveyed, almost every asset manager (98%) now has an ESG policy and 71% of asset managers hire dedicated ESG staff.
Yet this doesn’t reflect the whole picture, with 20% of managers not applying an ESG policy to all strategies. Significant work still lies ahead in translating ambitions into action.
Watch Joe Humphreys, a Sustainable Investment Associate within our Manager Research Team, discuss the trends we’ve identified in relation to ESG philosophies and policies, and whether these are actually being actioned.
Stewardship
- Of the 73% of asset managers that engage with holdings at the strategy level 73%
- only half track and report this activity 50%
%
only 26% of equity managers fully exercised their voting rights
%
88% of asset managers consider themselves to be meeting or leading in their stewardship efforts
‘For asset managers, being a responsible steward of capital means creating long-term value for clients’.
Given the importance of engagement to long-term returns and the delivery of real-world outcomes, how do managers approach stewardship, who do they engage with and what mechanisms do they use to exert their influence as active owners of invested capital?
Paul Lee, our Head of Stewardship and Sustainable Investment Strategy, assesses the responses to the stewardship section of our survey, highlighting crucial areas for development.
Climate Change
%
98% of asset managers have a firm-level net-zero target
%
but this only covers 34% of strategies
%
only 37% of the surveyed strategies monitor their portfolio's alignment with the goals of the Paris Agreement
While most asset managers are targeting net zero by 2050, 15% have set an earlier target date of 2030 or 2045.
Although the industry’s commitment to climate continues, as with other areas in our survey, the results show that practical and concrete responses to these commitments are less visible.
While 87% of the surveyed asset managers report integrating climate into their investment processes, at a strategy level, only 63% of strategies perform climate risk assessments and just 67% are monitoring emissions-based metrics.
Celine Legaspi, a Sustainable Investment Associate within our Manager Research Team who focuses on sustainable investment, addresses some of the key highlights we identified from the climate change section of our survey.
Inclusion & Diversity
Startlingly, fewer than 7% of firms recognise their teams are unreflective of broader demographics.
Our survey analyses Inclusion and Diversity within the asset management industry at a firm level, within investment teams and within the investment strategy.
At a firm level, two areas that scored poorly were:
- The link between senior remuneration and diversity performance
- Engagement with socioeconomic factors
Sarah Miller, a Vice President within our Manager Research Team, discusses the demographic makeup of asset managers and the changes she hopes to see moving forwards.
Impact Investing
As asset managers explore the impact opportunity set, we expect to see greater diversification across themes and more socially-focused areas.
Impact investing goes beyond traditional responsible and sustainable investing by targeting positive real-world environmental or social outcomes in addition to financial returns. At Redington, we’re increasingly exploring impact options for our clients because we fundamentally believe that, when executed effectively, these strategies have the potential to produce meaningful results that can deliver both financial and sustainability objectives.
Hear Celine Legaspi discussing the nascent area of impact investing and its growing prominence within the industry.
Emerging ESG issues
- 83% of asset managers consider biodiversity in their engagement strategy 83%
- but only 16% report on biodiversity KPIs 16%
%
70% of strategies integrate human rights into their investment processes
Whether as a result of firm-level commitments, client demand and/or financial materiality, it’s evident that asset managers are exploring a wide range of issues – from sustainable food systems to human capital management.
Looking to the future, more than 70% of the surveyed asset managers have begun to focus on new ESG issues over the past year.
Our Global Head of Sustainable Investment, Anastasia Guha, discusses the most prominent new ESG themes identified from our survey responses.
Explore more insights in the full report
Key contacts
If you would like to speak to a member of the team, please contact:
Global Head of Sustainable Investment
I am a sustainable investment specialist with over 15 years’ experience, most recently with the United Nations supported Principles of Responsible Investment, where I led a team supporting 1400 investors to implement environmental, social and governance criteria into investment strategy, decisions and stewardship. At Redington, I am responsible for leading the firm’s global sustainability strategy, […]
Head of Stewardship & Sustainable Investment Strategy
I have spent 20 years in leading roles in stewardship and ESG integration. First at Hermes, where I helped create and build the world-leading stewardship business Equity Ownership Service (EOS), and latterly as the first global head of governance - stewardship at Aberdeen Asset Management. For the last three years, I've been an independent consultant advising asset owners and fund managers on ESG issues, and leading projects for investor organisations including the PRI, Investor Forum, CFA UK, PLSA and ICGN.
