Press Release: Callan’s 2019 ESG Survey Shows Continued Commitment to Implementation

SAN FRANCISCO – October 10, 2019 – Callan, a leading institutional investment consulting firm, announced the results of its seventh annual ESG Survey, noting that 42% of U.S. institutional investors incorporated environmental, social, and governance (ESG) factors into their investment decision-making process in 2019. Since the survey’s launch (2013), there has been a 91% increase in respondents incorporating ESG factors into investment decisions.

The survey features responses from 89 U.S. institutional investors and reveals an ongoing disparity in ESG adoption rates by investor type and size. Historically, nonprofits have had the highest ESG adoption rates—while public plans have incorporated ESG factors at a higher rate than their corporate counterparts.

“A big takeaway this year is the emergence of integration as the preferred implementation trend,” says Callan ESG Practice Leader Anna West. “Of those incorporating ESG, 51% of investors did so with every investment decision, including manager selection. They’re asking investment managers how ESG is being integrated into their strategy and how they’re analyzing investments through an ESG lens.”

Tom Shingler, Callan senior vice president, consultant, and ESG Committee member, adds, “We see increasing client demand for consideration of ESG factors, and we believe that an integrated ESG approach is consistent with a long-term investment horizon. Traditionally, the emphasis has been on incorporation of ESG factors in public equity investing. That has extended to fixed income in the public markets and to private markets like private equity, private real estate, and infrastructure.”

Highlights:

  • New ESG Investors: ESG was relatively new for most: 62% began ESG investing in the past five years.
  • Public vs. Corporate: 49% of public plans incorporated ESG in 2019 (increase from 15% in 2013). Interest in ESG from corporate plans remains tepid at 19% (up from 14% in 2013).
  • Data and Evaluation: Around half of respondents incorporating ESG plan to seek more, better, or different ESG data in the future, beyond Investment managers and investment consultants.
  • Diversity Rules: More diverse boards were more likely to incorporate ESG into investment decisions than the less diverse, as gauged by differences in gender, racial and ethnic minorities, and age.

Find the survey in Callan’s Research Library (no-cost registration) and sign up for the ESG Survey webinar on Oct. 29.