Environmental, social and governance factors will transform the portfolios of institutional investors as they attract more interest from investors and governments worldwide, according to investment management consultant Michael Dieschbourg.
Private and government policies are re-shaping the investment environment, Dieschbourg said at the van Eyk conference in Sydney yesterday.
The majority of asset owners now want to integrate ESG into their decision-making, and consultants and advisers such as Mercer, Towers Perrin, McKinsey and Bain are already operating in the ESG area, he said.
“As institutional investors we have a duty to act in the best long-term interests of our beneficiaries,” Dieschbourg said.
“In this fiduciary role, we believe that environmental, social and corporate governance issues can affect the performance of investment portfolios. We also recognise that applying these principles may better align investors with broader objectives of society.”
Stock exchanges are now mandating ESG disclosure to attract foreign investors, he said.
Governments are also disclosing ESG factors in order to divest corporate stakes to long-term investors, he added.
