Despite widespread adoption of ESG policies and an increase in dedicated staff, asset managers are struggling to provide tangible evidence of the considerations in decision making.
According to Redington's annual Sustainable Investment survey, while 98% of managers have a firmwide ESG policy and 80% employ dedicated ESG or sustainable investment staff, 43% of fund houses are unable to provide a single example of a sell decision driven by an ESG view, up from 39% the previous year.
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A lack of ESG considerations in buy decisions has also increased, with 35% unable to produce an example, compared with 26% last year, while just 57% hold an exit strategy for negative ESG performance.
While managers are struggling to provide demonstrable evidence of ESG integration in their practices, 78% of equity and 84% of fixed income managers claim that environmental issues impact analyst recommendations.
The survey of 122 managers representing $37.7trn in assets under management, also found that the number of managers aligning remuneration policies with sustainable investment metrics has fallen, down from 70% in 2021 to 62% this year.
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Head of manager research at Redington Nick Samuels said the most important element was "changing investment practices on the ground" and while it was "encouraging" to see managers making progress across philosophies, there is "a long way to go" to take actions that move the dial.
"While we would expect to see some variation between ambition and action, how can managers really drive the change that is needed when so many are unable to evidence specific allocation decisions that were influenced by ESG factors this past year?" Samuels asked.
