Just 35% of insurers take ESG-criteria into consideration when making investment decisions, AXA IM’s survey among 122 insurance companies in France, the UK and Germany found. It’s mainly the small insurance companies that ignore ESG though. Among insurers with AuM over €5bn, 52% of respondents invest in funds or mandates that employ some form of ESG-screening.
But perhaps that’s just the case because large companies facer tighter supervision by regulators. ‘Tighter regulation’ is namely most frequently mentioned (by 53%) as the main driver behind ESG implementation by survey respondents.
However, four in 10 respondents also say that better performance is also a motivation to implement ESG-policies. And ESG is set to gain in popularity and become more mainstream among insurers, according to the survey. Almost half of French respondents, 39% of German and 31% of UK insurers plan to increase their allocation to ESG investments in the next 12 months, while none intend to decrease it.
This suggests investors of all stripes agree that ESG will become a dominant force in portfolios over the years to come. Research by Expert Investor conducted earlier this year found that a large majority of European fund selectors believe ESG-criteria will become “more integrated in fund selection and portfolio construction”. Only one in five think ESG will remain a niche area.
