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Institutional Investor Study 2019

Sustainability

Schroders’ third annual Institutional Investor Study analyses the investment perspectives of 650 institutional investors, collectively responsible for $25.4 trillion in assets and from 20 locations across the world. 

The Study provides a snapshot of some of the world’s largest investors’ key areas of focus and concern including the macroeconomic and geopolitical climate, return expectations, asset allocation and attitudes to private assets and sustainable investing.

There has been a continued rise in sustainable investing among global institutional investors over the last five years

Increase

No change

Decrease

We do not invest in sustainable investments

75% of institutions state sustainability will play a more important role in investments over the next five years

  • Global
  • North America
  • Europe
  • Latin America
  • Asia-Pacific

2019

2018

2017

It is significant to note there has been a 45% decline globally in institutional investors not believing in sustainable investments over the last three years

  • 2017
  • 2018
  • 2019

Institutional investors focus on a wide variety of areas when it comes to engaging on sustainable issues, but climate change and corporate strategy are the leading engagement strategies

Chart graphic

Climate Change

Chart graphic

Corporate Strategy

Chart graphic

Accounting Quality

map of europe
North America

65%

Europe

70%

Asia-Pacific

56%

Latin America

55%

Integrating sustainability into the investment process is the most favoured approach for implementing sustainability into funds

However other approaches are also proving popular, highlighting institutional investors are most likely to blend different approaches when building their sustainability strategies

  • North America
  • Europe
  • Latin America
  • Asia-Pacific

Equities are considered the most suitable asset class for implementing sustainability, followed by infrastructure and credit

Equities
Infrastructure
Credit
Real estate
Alternatives
  • 2019
  • 2018
  • 2017

There are still numerous challenges when investing sustainably – a consistent theme over the last three years

Performance concerns

Lack of transparency and reported data

Difficulty measuring and managing risk

Performance data and greater transparency are seen as the key factors to help increase allocations to sustainable investments in the long-term

  • Global
  • North America
  • Europe
  • Latin America
  • Asia-Pacific
  • Performance data
  • Greater transparency on both financial and non-financial performance reporting
  • Better sustainability-related benchmarks
  • More training for investment teams
  • More sustainable investment options
  • More sustainable data providers
  • Greater support from senior leadership
  • 49%
  • 36%
  • 34%
  • 26%
  • 26%
  • 25%
  • 12%
  • 67%
  • 38%
  • 43%
  • 31%
  • 33%
  • 35%
  • 9%
  • 42%
  • 37%
  • 37%
  • 24%
  • 27%
  • 18%
  • 12%
  • 36%
  • 28%
  • 22%
  • 16%
  • 20%
  • 18%
  • 16%
  • 45%
  • 35%
  • 25%
  • 27%
  • 18%
  • 27%
  • 15%

Schroders commissioned CoreData to conduct the third Institutional Investor Study to analyse the world’s largest investors’ key areas of focus and concern including the macroeconomic and geopolitical climate, return expectations, asset allocation and attitudes to private assets and sustainable investing. The respondent pool represents a spectrum of institutions, including pension funds, insurance companies, sovereign wealth funds, endowments and foundations managing approximately $25.4 trillion in assets. The research was carried out in May 2019. The 650 institutional respondents were split as follows: 175 in North America, 250 in Europe, 175 in Asia-Pacific and 50 in Latin America. Respondents were sourced from 20 different locations.

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