Eight of 10 advisers think that an ESG-tilted portfolio will outperform over the next 25 years, when compared an equivalent non-ESG portfolio.
This survey was conducted among attendees at a recent virtual Sustainable Pensions summit, hosted by Corporate Adviser. TO VIEW THE VIDEO SESSIONS AT THE EVENT CLICK HERE.
It shows that is widespread acceptance among the adviser community that these strategies may deliver better outcomes for members over the longer term. Only a slightly smaller percentage (76 per cent) believing that these ESG portfolios will outperform, even on a 10 year timeframe.
The question asked respondents to consider performance net of charges.
Advisers attending this online summit were also broadly in agreement that there should be tighter definitions of ESG. More than eight in 10 respondents (83 per cent) said they didn’t think funds should be descried as ESG if they didn’t tile, excluded or screen out certain stocks or sectors.
Currently some asset managers market describe themselves as ESG providers as the use shareholder engagement and company votes to try to drive up standards. However it appears that advisers also want to see this backed by screens or exclusions when it comes to the underlying portfolio if it is is being promoted as an ESG fund to investors.
However advisers agree that there is some confusion around the ESG terminology. Six out of 10 (62 per cent) of advisers said that the industry and politicians were frequently guilty of conflating ESG with ethical and moral consideration when talking to the public.
One in three advisers (30 per cent) said this happened occasionally, while only 4.76 per cent of respondents said this very rarely happened.
There was also widespread agreement that ESG remains a long-term consideration and that trustees’ fiduciary duty extends beyond the immediate period of investment and should take into account the world in which the member retires. A total of 69 per cent thought trustees should be looking at this wider picture as part of their remit, while 31 per cent disagreed.
Finally despite Brexit looming an overwhelming majority of advisers – 97 per cent – expected the UK to remain broadly aligned with the EU’s ESG and responsible investment regulation in future. Less than 3 per cent are anticipating any signficant divergence on this issue.
