Tales of ESG’s death have been greatly exaggerated

Corporate executives might be making a lot of noise about ESG (environmental, social and governance) — some of it positive, some not — but when it comes to investors, sustainability concerns appear to be here to stay.

Nearly 60% of investors surveyed for a new PitchBook report say that at least a quarter of their portfolio has a sustainable mandate, and about a third say that at least half of their portfolio fits the definition. What’s more, over half of participants said sustainability was a higher priority than outright investment performance, with around 10% saying it’s the only factor worth considering.

Not everyone is sold, though: The number of investors who dismiss sustainability appears to be a relatively slim minority, with fewer than 20% of participants saying that ESG has no place as an investment criteria.

The line between the yeas and nays appears to be thickening, and investors who held strong but not strident opinions in previous years appear to be moving toward one extreme or another.

But that still leaves plenty of room in the middle, and that’s where investors seem to be more welcoming of sustainability claims. When asked to describe themselves on a scale from one to nine, from performance-centric to sustainability-centric, the average has trended in favor of ESG.

Central American, South American and Caribbean investors are at the forefront, with half of the participants from those regions saying they have integrated sustainable investment principles throughout their portfolio. European investors come in second at 42%, and North America and Asia-Pacific tie with 36% each.