Global index provider FTSE Russell’s fourth annual Smart Sustainability Survey of global asset owner attitudes, awareness and behavior around the combination of Sustainable Investment and smart beta has uncovered a significant shift in the “where” and “how” of this important trend.
In terms of “where,” FTSE Russell sees the most ESG implementation by asset owners, EMEA is clearly still on top. This year’s survey, however, has found North America to be a fast follower, with a nearly 25% rise in the last year alone.
And in terms of “how” sustainable investment is being implemented by asset owners globally, this year’s survey points out a clear migration toward re-weighting, or “tilting” index strategies and away from negative screening. In fact, those asset owners considering re-weighting approaches increased by nearly 20% while the negative screeners declined by 16% year-over-year. This shift in approaches reflects a growing emphasis on ESG integration over traditional screening in index-based portfolios.
Tony Campos, director, sustainable investment product management, FTSE Russell:
“It is not surprising to see North America coming on strong in adoption of sustainable investment, and smart sustainability approaches. Despite what some may view as recent headwinds in US policy, this is a long-term trend that has arrived and is growing, particularly given increased focused on the social responsibility recent months. it is not surprising to see the growing sophistication of sustainable investment strategies amid improving technology and index innovation which allow the investor to discreetly tilt toward certain ESG criteria while achieving broad market exposure and risk/return objectives.”
You can go to the FTSE Russell website for more information on the 2020 FTSE Russell Smart Sustainability Survey.
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