Sustainability grows in importance for investment firms

The majority of investment companies consider sustainability to be integral to investor relations outreach, according to a new survey by Thomson Reuters.

More than half (56%) of companies say sustainability is a growing remit in discussions of investor outreach and 34% of asset managers look for socially responsible investment (SRI) and environmental, social and corporate governance (ESG) research to be incorporated into all analyses they receive from brokers. 

Thomson Reuters and the UK Sustainable Investment and Finance Association (UKSIF) announced the findings yesterday (16 July) as the results of the Thomson Reuters Extel/UKSIF (SRI) and sustainability survey.

The 2014 survey represents the views of more than 360 investment professionals from 27 countries and includes responses from 179 buy-side firms and 14 brokerage firms and research houses.

UKSIF chief executive Simon Howard said: “Two weeks ago the Law Commission said fiduciaries ‘should take financially material factors into account’ and cited ESG elements as an example of those factors.

“This highlights how SRI and sustainability thinking is relevant to the mainstream. These awards showcase the financial sector’s successful integration of sustainability and ESG across the value chain, from brokers through fund managers to companies.”

Green bonds

The survey found that most critical to SRI/ESG research for buyers is thematic reviews and ideas, with 80% on the buyside rating this as very important.

Extel at Thomson Reuters managing director Steve Kelly said: “The provision of research has become both more specialised and multi-faceted, reflecting the desire from investors for more sophisticated analyses; and ideas directly relevant to investment opportunities.”

Some of the key rankings from the survey included Kepler Cheuvreux leading as the top brokerage firm for SRI and sustainability, and HSBC as the leading brokerage firm for integrated research on climate change.

The survey comes at the same time as an announcement by HSBC and the Climate Bonds Initiative; that the market for green bonds has grown 60% this year compared to 2013, with a total value of $18.3bn issued in the first half of 2014.

The sustainability survey also comes in same month that environmental campaigners and Forum for the Future founder Jonathon Porritt claimed that many investors are still not convinced by sustainability reporting.

“You wouldn’t believe the number of chief finance officers and chief executive officers who will come out of an investor meeting saying ‘it’s still down at the bottom of the agenda and nobody really cares about this as yet’,” said Porritt. 

“I think we’re beginning to see pointers that this will change. They [investors] are getting better and beginning to understand the value of corporate sustainability plans of action, but it is still agonisingly slow.”

Matt Field

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