A survey of members of the European investment community, including asset managers and private investors, on attitudes to ESG/impact-related topics and the UN Sustainable Development Goals (SDGs), conducted by Berenberg WAM, the Wealth and Asset Management arm of Berenberg private bank, has revealed that the Covid-19 pandemic has increased the significance of the social aspects of ESG for investors.
Among 112 respondents, who were primarily from the UK and Germany, c.47% considered the social ‘S’ element of ESG as the most important, followed by 35% selecting environmental factors (‘E’) and only 18% chose governance (‘G’). Social factors were also thought to have gained the most in importance due to the pandemic, followed by environmental factors.
The reason for this shift has been attributed by participants to the fact that the pandemic has increased scrutiny into how companies – and governments – have dealt with the impact of countries’ lockdown and economic recession on their staff, suppliers, customers and communities. In addition, it was felt Covid-19 had thrown existing inequalities into greater focus, thereby spurring action to address them, as well as highlighted the necessity to think harder about changes to working practices and employee wellbeing in the wake of the pandemic.
When asked to predict what the most relevant ESG product would be for them in five years’ time, actively managed ESG strategies emerged as the favourite for 19% of respondents. This was followed by 17% for impact investments and 15% for Sustainability/SDG-linked bonds. The findings point towards potential wariness of passive vehicles for ESG purposes, where only 6% of respondents chose it as the most relevant product in five years’ time.