Global Investors Eye Increased ESG Allocations, Societe Generale Q4 2024 Survey Revealed
Conducted in the fourth quarter of 2024, the survey gathered insights from 147 institutional investors* in the credit market, focusing on ESG trends in four main areas: motives for ESG consideration, approaches to ESG consideration, integration for ESG consideration, and market expectations and outlook.
Key Findings:
1. Motives for ESG Consideration
The motives for ESG investment vary by institution type. Among surveyed asset managers, 80% identified end investor demand as the primary driver, while surveyed banks (83%) cited ESG risk mitigation as a significant factor. Interestingly, 43% of surveyed asset managers view ESG as neutral for financial performance, whereas 42% of surveyed banks see it as a positive driver.
2. Approaches to ESG Consideration
Key challenges include the risk of greenwashing and lack of standardized data, with 58% and 64% of respondents highlighting these concerns, respectively. Surveyed institutions headquartered in the Americas are slightly behind other regions in ESG maturity, exhibiting lower adoption rates of ESG policies and exclusion criteria compared to those in EMEA and Asia Pacific.
3. Integration for ESG Consideration
Engagement and dialogue emerged as the most common ESG investment approach (65%), surpassing both negative (56%) and positive screenings (43%). Due to inconsistencies in ESG data, 54% of respondents use proprietary ratings to classify ESG investments.
4. Market Expectations and Outlook
Surveyed Investors in both the Americas and EMEA regions showed a strong interest in Green, Social, and Sustainability products, particularly transition bonds (55%) and social bonds (41%). Notably, more than 81% of respondents plan to increase their ESG allocations, with a preference for low carbon-intensive issuers over ESG-labeled products.
This survey underscored the growing commitment among global investors to embed ESG considerations into their investment strategies, reflecting an evolving landscape in sustainable finance.
View the full results of the latest survey here.
* The majority of respondents were located in the EMEA region (73%), with banks representing a large percentage (62%), followed by asset managers (31%) and pension funds (5%).