While the overall incorporation of environmental, social and governance in investment decisions by financial professionals is climbing higher, there is shrinking consensus on the matter, according to a recent HSBC survey.
On a scale of 1 to 10 – with 1 being zero and 10 being complete – financial professionals globally, on average, rated their incorporation of ESG into investment decisions at 5.2, according to the third edition of the «HSBC ESG Sentiment Survey».
While this represents an overall uptick, the survey interestingly noted a widening range of responses.
«We note that the standard deviation continues to rise, showing 'less collective agreement' in one sense, or that ESG incorporation is very varied,» the survey said.
Equities Versus Fixed Income
One potential factor causing the spread could be driven by differences in asset classes.
«Respondents with responsibilities for equities saw an improvement in mean ESG incorporation, whereas those with responsibilities for fixed income saw declines. Perhaps this is related to the large hikes in interest rates seen in many markets,» the survey explained.
Diversity and Inclusion
In terms of top ESG priorities in the coming 12 months, diversity and inclusion was ranked at the top at 25 percent. The issue secured a strong lead in most individual regions except in Europe as well as the Middle East and North Africa where human rights and supply chain issues, respectively, were close runner-ups.
Overall, supply chain issues were ranked as the second highest ESG priority at 16 percent followed by human rights (16 percent), employment issues (10 percent), data privacy (8 percent) and others (17 percent), which included a wide range of responses across demographics, religion, immigration and more.
11 percent of respondents refused to name their top ESG priority.
