The ESG Phenomenon: Capital Group Study

Editorial Staff 28 October 2022

The ESG Phenomenon: Capital Group Study

The latest developments in the ESG space.

A new study by Capital Group, an asset manager, shows that 40 per cent of global investors that people are shy of adopting ESG ideas because there's not enough innovation in the space.

According to the study, investors think that there are not enough funds offering a broad spectrum of themes across ESG. They want more innovative products and recognise the need to invest in companies that are looking to transition their business models to be more sustainable.
Capital Group's ESG Global Study surveyed 1,130 institutional and wholesale investors, including pension funds, family offices and insurance companies, as well as funds of funds, retail/private banks and financial advisors, located in Europe, Asia-Pacific and North America. It is the second instalment of the 2022 global study, which seeks to identify key drivers and challenges facing ESG investing.
“Investors looking to access a broad range of ESG themes must currently buy several single-thematic or narrowly focused funds, underscoring the need for all-in-one solutions that allow investors to target sustainability through the widest lens,” Jessica Ground, global head of ESG at Capital Group, said in a statement. 

“Furthermore, the study highlights a growing acceptance within the investment community that the transition towards a sustainable future cannot be achieved solely by backing companies that are already leaders at the expense of transitioning companies,” she added.
The study highlights a gap between investor demand and the availability of funds that provide exposure to multiple themes:

-- Nearly four in 10 of global investors think a lack of product innovation is holding back greater adoption of ESG; 
-- Almost half of global investors think there are not enough funds aligned to the United Nations Sustainable Development Goals; 
-- Nearly half also report that existing funds that target the SDGs overly focus on environmental issues; and 
-- 43 per cent say there is a specific need for multi-thematic ESG funds.

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