ESG has taken our industry’s love for abbreviations to a whole new level. The remarkable rise to prominence of these three letters, which have become ubiquitous shorthand for those in the finance sector, demonstrates how ESG investing has moved from niche to mainstream. The growing importance of environmental, social and governance issues has seen both investors and asset managers ever more keen to showcase their sustainable credentials.

But in practice, to what extent are investors truly embedding ESG into the investment process? CoreData’s latest report sheds new light on this much talked-about topic. The study reveals that despite all the grandstanding, institutional investors remain early stage adopters of ESG and are yet to fully embed sustainable investments into portfolios.

Our study of 800 global institutional investors found only about one third are ESG ‘embedders’ showing a high degree of incorporation and conviction through corporate engagement, sustainability-themed investing and impact investing. The majority of investors are ESG ‘adopters’ deploying a combination of negative screening, positive screening and integrating ESG factors into investment decision-making . . .