ESG remains divisive, many advisors just don’t think it’s sustainable

investmentnews.com:

ESG has become one of the most divisive topics in investing and not just in the US, according to new research.

While the survey of financial advisors shows that the Americas region overall is someway behind Europe and Asia-Pacific for the percentage of their book of business invested in ESG, it also reveals that more than half of respondents globally said the share is less than 10%.

The poll by international investment firm Vontobel found that 24% of respondents from Europe said that at least a quarter of their total book in ESG, this falls to 16% in APAC, and 11% in the Americas.

For those advisors that said they have limited or no investments in ESG, 80% said this is because they think it’s just a trend, but overall, almost two thirds expect to have at least 10% invested in ESG over the next three years, and this was seen across the three regions included in the research.

Asked about performance, 65% of the survey’s respondents said that ESG investing does not have a negative impact on investment performance and most advisors said it had a neutral to positive impact.

However, concerns around inconsistent standards, metrics and taxonomies continue to pose barriers to advising about ESG investments (88% said it makes it somewhat or very challenging), followed by insufficient sustainable products available across all asset classes (82%), evolving ESG regulations (81%), and a lack of ESG data, research and information (80%).

Despite attacks on environmental, social, and governance data being used, one former Congressman said he is hopeful about climate investing.

Advisors said that they rely most on financial institutions and consultants, industry reports and whitepapers, and financial news and journals when researching