Acasă » General Interest » Two-thirds of investors say ESG will not have a significant influence on future projects

Two-thirds of investors say ESG will not have a significant influence on future projects

29 January 2025
ESG
Bogdan Tudorache

Around 92% of investors are not willing to sacrifice short-term gains for long-term benefits from ESG investments, and 66% believe that ESG will have a smaller influence on future investment decisions, a new EY study reveals. Around 85% of investors say that greenwashing is a more acute problem than five years ago, and more than a third of investors (36%) are dissatisfied with the progress made by companies in non-financial reporting. However, 93% believe that organizations will meet their decarbonization and sustainability goals, the study also says.

The global investor community is dominated by a narrow view of climate change and sustainability, fueling a focus on short-term performance over long-term benefits from environmental, social and governance (ESG) investing, according to the latest EY Institutional Investor Survey.

The survey, now in its 11th year, polls 350 key decision-makers at investment firms around the world, including asset managers, wealth managers, insurers and pension funds, and explores the extent to which they incorporate sustainability into their investment strategies, as well as the use of sustainability reporting in investment decision-making.

The findings suggest that there is a significant gap between investors’ statements about the importance of ESG and their actions. Nearly nine in ten respondents (88%) said their firms have made greater use of ESG information in the past year, reflecting a huge increase in corporate reporting and the proliferation of information needed to support reporting. However, ESG issues do not appear to be a priority in decision-making. More than nine in ten investors surveyed (92%) do not believe it is worth sacrificing short-term performance for the potential longer-term benefits of ESG investments, and two-thirds (66%) said ESG issues are likely to play a smaller role in investment decisions in the coming years.

Where investors do, however, consider non-financial performance in their decision-making, they are more likely to look to the near future rather than the longer term. Only 25% of respondents said they were prepared to assess the long-term effects of ESG policies and performance, while 57% said they felt able to analyze the short-term effects.

Just over half of investors surveyed (55%) believe that climate change will have an impact on their investment strategies, with 63% saying the main factor will be changes in the business cycle and 62% being most influenced by possible changes in global trade restrictions and tariffs.

In addition, the vast majority of investors surveyed (93%) said they were optimistic about companies achieving their sustainability and decarbonization goals, and 62% said they were well prepared to assess companies’ climate reporting, but the source of this optimism seems uncertain: only 17% said they monitor changes in companies’ climate policies.

This lack of priority given to ESG issues may be partly due to a suspicion among the investment community that companies are not reporting accurately on their sustainability track record. Almost nine in ten investor respondents (85%) believe that greenwashing is a bigger problem than it was five years ago.

 

 

Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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