When it comes to environmental, social and governance (ESG) investing, investors in the United States are far less accepting than their European counterparts, according to a new survey from RBC Global Asset Management.
The survey finds that two-thirds of institutional investors use ESG considerations as part of their investment approach, and 25% expect to increase their allocation to managers with ESG-based investment strategies within a year.
And yet, investors in the U.S. are still lagging behind their European counterparts when it comes to ESG investing.
According to the survey, a full 67% of global respondents use ESG principles as part of their investment approach. By region, more investors in Europe (85%) than in Canada (73%) and the US (49%) incorporate ESG analysis.
And while 25% of survey respondents plan to increase their allocation to ESG investment strategies within the next year, the U.S. lags behind. According to the survey, U.S. adoption, which is 25%, is far behind Europe, where that figure is 49%.
Even where U.S. institutions are adopting ESG strategies, they appear to be doing so more cautiously than their European counterparts.
When asked to what extent ESG principles are used as part of their investment approach, only 12% of U.S. respondents said they “significantly used” ESG principles versus 45% in Europe. More Americans (37%) said they “somewhat used” these ESG principles.
In the U.S., 50% of respondents who use ESG factor it into less than 20% of their portfolios. Meanwhile, 43% of Europeans factor it in more than 80% of their portfolios.