Global asset managers are increasingly sensitive to the social component of ESG factors amid the Covid-19 pandemic, according to a new survey from the responsible investment arm of proxy advisory firm Institutional Shareholder Services Inc.
The ISS ESG survey of 65 global asset managers in the third quarter found that a majority of respondents (62.5%) said the social aspect of ESG — such as labour practices, diversity and safety — is attracting more attention since the pandemic began.
Additionally, it found that 44.1% expect future ESG ratings to place a greater weight on issues such as workplace safety, diversity and supply chain labour.
While social issues are on the rise, governance remains the most important ESG consideration when it comes to fund managers’ investment analysis and stewardship activities, ISS ESG said.
“Respondents whose ESG engagements have grown since the outbreak of the pandemic report that the primary drivers of growth include client and stakeholder demand, racial inequality and diversity, and regulatory changes,” it said.
With the growing demand for ESG investing, the survey found that 37.5% of respondents have either added, or intend to add, new staff to manage ESG-related issues.
“It is clear from this survey that the Covid-19 pandemic has had a major influence on many investors’ thinking in terms of ESG research and integration,” said Maura Souders, associate at ISS ESG.
“A heightened focus on social issues is paired with an increased willingness to invest in an in-house ESG capacity.”