01 April 2019
There is no “one best way” to do ESG integration and no “silver bullet” to ESG integration.
Investors should focus on ESG analysis, not ESG investing. ESG investing is often used as a marketing slogan, whereas ESG analysis is a fundamental part of investment analysis and requires a disciplined and tangible approach to be fully integrated into the investment process.
Governance is the ESG factor most investors are incorporating into their process. Although environmental and social factors are gaining acceptance, they are starting from a low base.
ESG integration is more advanced in equities than fixed income.
Although portfolio managers and analysts are more frequently incorporating ESG into the investment process, they rarely adjust their models based on ESG data.
The main drivers of ESG integration are risk management and client demand; the main barriers to ESG integration include a limited understanding of ESG issues and a lack of comparable ESG data.
Read the full report at this link .