Environmental, social and governance (ESG) factors are now integrated at $6.8trn (€5trn) of internally active managed assets worldwide, according to the United Nations Principles for Responsible Investment.
The PRI has reported that such assets subject to integration by its 808 signatories now represents 7% of the total market, estimated at $121trn. And it says the figure “conservatively underestimates” the findings of its latest survey of signatories.
The figure has jumped from $3.6trn, or 4% of the total market, in 2008. The numbers come in the PRI’s new Report on Progress. The 60-page report analyses signatory progress and implementation. Of the 433 signatories who completed the PRI assessment survey, 166 have opted to disclose their responses here.
Among the report’s findings is that 66% of asset owners now put specific ESG considerations into their mandates with asset managers – up from 63% a year ago and significantly ahead of the 38% recorded in 2007.
However, the proportion of respondents that include ESG-related criteria in their contractual agreements and incentive scheme structures across their third party providers are fewer than the percentage thatinclude them in their selection process.
Just 30% of asset owners provide financial incentives to brokers to produce quality ESG research – the same as last year. The PRI says this lack of progress “makes it more difficult for brokers to turn their attention to these issues”.
The PRI also said that 223 of its signatories were involved in collaborative engagements promoted through its Clearinghouse over the past year.
The organisation reported “impressive growth” of activity in Spain, North America, Denmark and New Zealand. Over 4,000 engagements with companies were reported by signatories.
With 268 signatories having joined the PRI since July 2009, the total value of the assets under signatories’ management now stands at $22trn – over 10% of the estimated total value of global capital markets.
Two firms have been de-listed from the UN PRI, Australia’s Axiom Properties and Carnbrea & Co. Eight have left: Apostle Asset management, Forma Futura Invest, Natural investments LLC, Nevastar Finance, Principle Capital Partners, Systematic Absolute Return, Stock Rate Asset Management and Sutterluty Investment Management.