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Laxman Pai, Opalesque Asia: Environmental, social, and governance (ESG) has become mainstream in developed markets driven by regulations and investor demand, but further adoption and integration into the investment lifecycle requires greater transparency and trust in the data, said Preqin.
"From a niche market to the mainstream, environmental, social, and governance (ESG) investing has reached critical mass as of late 2020," said Charles McGrath, Senior Writer at Preqin.
Most of the world's largest GPs are UN Principles for Responsible Investing (PRI) signatories and have adopted ESG across their strategies, following the lead of the world's largest institutional investors, he said.
Investment managers surveyed by Preqin expect ESG policies to have more influence on their investment practices. Nearly 80% see a moderate (47%) to significant (33%) increase in their current ESG practices by 2025, with less than 1% expecting ESG to have less of an influence on their business.
Ethical considerations, demand from LPs, and best practices are the main drivers of ESG adoption today, the report said.
More than a third (34%) of respondents think regulation will be a key ESG driver in 2025, though, up from 17% that regard it as such now.
The impact of regulation is visible most clearly in Europe, where EU regulations pushed fund managers to adopt ESG principles. Of the $2.53tn of invested alternative assets in the region since 2011, 63% are managed under ...................... To view our full article Click here
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