Institutional investors will increasingly accept SRI principles over the coming 12 months while so-called impact investing will lead growth in the sector, according to a survey of SRI professionals by investment adviser First Affirmative Financial Network.
Just under 62 percent of SRI professionals surveyed predict acceptance among institutional investors of SRI and ESG principles will increase over the next year, while only 7.5 percent say it won’t, according to the results of the survey carried out in August among 218 SRI/ESG professionals throughout North America.
At the same time, 35.4 percent of those surveyed predict the fastest-growing area of SRI investment will be impact investing – including approaches such as micro-finance and private equity – which allows institutions and private investors to address environmental or social issues while also making a profit.
‘After the recent financial crisis, more and more investors have hungered for a way to have a more direct connection between their money and the impact it is having in the world,’ says Steve Schueth, First Affirmative’s president, in a statement.
‘This survey shows that the sustainable, responsible, impact investment industry is innovative and vibrant, as vital for institutions and individual investors today as it was decades ago during the fight against apartheid. Impact investing is the latest way in which investment professionals who work with socially conscious investors are helping to deliver positive returns as well as positive change – for the common good.’
After impact investing, screened investing/ESG integration is seen as the fastest-rising area of investment in the sector, receiving 29.2 percent of respondents’ votes.
Community investing comes third, cited by 10.4 percent of those surveyed. Shareowner advocacy comes fourth, with 9.9 percent.
Asked to predict the performance of SRI over the next 12 months, 45.8 percent of those surveyed say they will ‘do about as well as the overall market’, while 23.1 percent of respondents say they will perform ‘slightly better than the overall market’ and 7.1 percent think they will do ‘slightly worse’.
Respondents were also asked to rate the effectiveness of various strategies meant to help promote institutional investor acceptance of SRI.
In the top spot, with 47.1 percent approval, is the strategy of placing ‘increased emphasis on impact investing for institutions that have ‘making a difference’ as part of their mission.’
In second place comes the strategy of improving the performance of SRI, with 43.3 percent of respondents backing it.
