Seventy five per cent of asset owners and 62% of asset managers hold 25% or more of their money in ESG investments, according to a survey by BNP Paribas.

This is significantly higher than the 2017 figure, when 48% of owners and 53% of managers were found investing in ESG vehicles.

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The findings are from a survey by BNP Paribas Securities Services (BNPP SS), which polled 347 institutional investors using ESG strategies.

The study also found 65% of the respondents aligning their investment framework with the UN Sustainable Development Goals (SDGs).

When asked about the reason for interest in ESG, 52% of respondents said that such strategies offered improved long-term returns.

Besides, 60% of those surveyed anticipate that their ESG portfolios will outperform over the coming five years.

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However, impediments still remain and like 2017, data was cited was the biggest hurdle in this space.

The respondents also found technology costs becoming a key constraint in the area.

However, investors are still bullish on the future of ESG, with 90% forecasting over 25% fund allocations towards ESG by 2021.

BNPP SS head of asset owners Florence Fontan said: “ESG investment is becoming increasingly important for investors, and our survey highlights investors’ appetite to pursue both purpose and performance.

“However, practical integration has its challenges due to data and technology barriers, and deep ESG investment is still finding its feet.”

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