ESG investment is more than a fad, according to three survey results conducted in the last year. While approaches and definitions vary around the world, not only are investing opportunities growing year to year, but so is investor demand.
Results from new surveys conducted by RBC Wealth Management and RBC Global Asset Management showcase how much investors can anticipate the ESG investment world to continue growing in the near future. Three surveys highlight that demand for ESG knowledge and information continues to be a big topic of interest for investors in 2022.
For example, the RBC Global Asset Management ESG in a Pandemic World 2021 Report found that 72% of global investors integrate ESG principles in their investment approach and decision-making. Investors in Europe lead the practice with 96% of respondents saying they use ESG in decision-making. Canada-based respondents dropped eight points in the last year to 81%, and U.S. respondents have plateaued between 64% and 66% for the past three years.
Correspondingly, 83% of global investors think ESG-integrated portfolios are likely to do as well or better than non-ESG-integrated portfolios. But that viewpoint drops in the U.S., with only three-quarters of investors, according to the Global Asset Management report. According to the RBC U.S. Wealth Management 2022 ESG Survey conducted with clients, half the respondents said financial performance and Return on Investment (ROI) were higher priorities compared to ESG impact. However, millennials in the U.S. have a slightly different point of view. Millennials who responded to the High-Net-Worth Millennial Survey by RBC Wealth Management were not afraid to incorporate ESG investing into their portfolios, even at the risk of immediate financial gain. In fact, 80% reported that ESG guides all or most of their investment decisions. With their long-term approach to investing, 85% of the millennials expected that over the long term, ESG-rated investments will outperform the market.
For U.S. respondents to the ESG survey, governance, corporate ethics and regulatory compliance, and transparency were the top ESG elements focused on when planning their ESG investments. Females also rated human rights and climate change as top elements. At a global level, respondents to the Global Asset Management report listed anti-corruption, cyber security and climate change as the top three elements.
These survey results highlight that the ESG trend appears to be less of a bubble and more of a long-term investment strategy for many investors around the globe. Plus, they help explain why ESG investing opportunities are growing year after year—assets are expected to reach $50 trillion by 2025, according to Bloomberg Intelligence, as well as why ESG reporting metrics are becoming a global concern, as determined by the 2021 COP26 United Nations Climate Change Conference in Glasgow.
To keep up with the demand for more knowledge about ESG investment, RBC Wealth Management advisors stay equipped with the ESG knowledge, experience and tools to support clients’ goals and connect them with appropriate goal-related investment opportunities.