Nearly one in three said social factors are, and 26% selected governance as their main focus area. When considering the impact ESG will have on their investment activities, 43% of the institutional investors surveyed said the environmental factor is the most important one for them. Meanwhile, 14% said they expect their focus on the area to increase dramatically between now and 2024, with just 7% claiming it will decrease. SigTech’s survey of 100 institutional investors, which combine for nearly $1 trillion in total assets under management, found that 62% of pension funds and other institutional investors expect to increase their focus on ESG over the next three years.
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“That wasn’t really the case five years ago, and that’s why are related as the main driver in the use of ESG.” “If an investor has defined policy and goes out there looking for a strategy, that’s how custom indexing and technology comes into play,” Leveau said. “With ESG comes the need for customization, because we know there is not a universal standard,” said Daniel Leveau, head of investor solutions at London-based SigTech.
Fast developing financial technologies and the growing appeal of direct indexing are paving the way for the increased appeal and access to socially responsible investing among financial advisers and institutional investors.Īccording to new research by quantitative technology provider SigTech, fintech is seen as enabling increased portfolio customization when it comes to environmental, social and governance investing, which will go a long way toward addressing many of the challenges facing the general investment category.