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Alternative Market Briefing

Institutional investors want to solve the world's problems, if the price is right

Wednesday, May 20, 2020

Bailey McCann, Opalesque New York:

96% of institutional investors believe they have an important role to play in addressing the world's most pressing challenges, including climate change, social and economic inequality, and the need for infrastructure development, according to a new Natixis Investment Managers survey. However, getting there is a different story. Alongside the desire to solve problems, survey respondents noted that the pressure for short-term performance can mean it isn't possible to let strategies fully play out.

Just under half say their ability to execute long-term strategies is inhibited by the market's focus on short-term performance expectations. Meanwhile, 31% also report internal pressure from their own boards' focus on quarterly results.

Additionally, the level of customization present in many ESG strategies means that "solving problems" is pretty widely defined. Six in ten respondents said they would be more willing to invest in projects that help provide solutions to societal challenges if those projects presented a risk/return profile in line with their portfolios' longterm goals.

"What we're seeing from studying the data is that ESG is part of most investors' long-term investment strategies. But, the way they define ESG is going to be different from organization to organization," says Dave Goodsell, executive director of the Natixis Center for Investor Insight in an interview with Opalesque. "When it comes to ESG, inves......................

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