Although investors still show appetite for the adoption of ESG principles, global macroeconomic and political upheaval has been distracting them from pursuing long-term sustainability. HSBC’s seventh ‘ESG Sentiment Survey’ collated the views of 150 financial institutions collectively representing US$6.7 trillion in assets, displaying results that sent “blurry signals”. Where ESG does not form an integral part of the investment process, the momentum has been lost, the report noted. “For those where ESG is an important framework, the refinement process is now well underway – for example, the reasons for doing ESG weakened across the board, but sustainability remains partly as an objective across many funds,” HSBC noted. Regional perspectives also diverge. Asia-based investors, for example, believe they are the main driver of sustainability compared to governments and businesses across the region. Respondents also highlighted climate adaptation and social issues as ongoing challenges for ESG-related investing. On adaptation, a third of respondents said they were actively considering the resilience of their investments and looking at technological solutions for adaptation. Fewer said they were either not interested in adaptation or did not look at it because investment returns were “less tangible”. On social issues, just under three-tenths said they did not consider social issues explicitly, with the majority looking at related themes from different angles – some considering it on a global basis uniformly, and others on a regional or country basis. “A small segment of respondents was working on social frameworks, whereas others found it challenging to do so,” the report added.
