Data standards of major concern for SRI investors, survey finds


Despite growing interest in socially responsible investing, data remains a significant issue for investors, according to a new survey.

A survey of institutional and high net worth (HNW) investors and their advisers, conducted by Federated Hermes, found that nearly three-quarters – 71% – were concerned about the “Data and measurement quality” companies in their investment portfolios.

And this despite a significant proportion of investors declaring that they integrate environmental, social and governance (ESG) factors into their investment processes. Others said they were making an exclusion or inclusion decision based on ESG metrics or data.

The transparency of companies regarding ESG risks and data, as well as their commitment to the objectives and principles of sustainable development, were considered very important by more than 80% of respondents.

Of the more than 200 financial advisers and wealth managers surveyed by Federated Hermes, two-thirds (67%) say they already consider responsible investing factors in their recommendations, while a further 25% plan to do so.

Almost all of the advisers – 95% of them – said clients asked them about ESG factors when discussing investing. This has increased considerably since the start of the Covid-19 pandemic.

An advisor told the survey: “A few months ago, Exxon’s situation with the activist investor was a perfect example where we, at one point, owned Exxon. It sparked conversation with clients who told them, “Well, have you thought about oil and gas and their future in the context of ESG? This is how a lot of these things happen.

This was reflected in data from HNW: Of the 100 investors surveyed, 59% said an advisor recommended that they take ESG concerns into account when making investment decisions.

“ESG is increasingly important to investment professionals as their clients, boards of directors and investment committees demand more information and options” said Anne Kruczek, head of the responsible investment office at Federated Hermes.

“Evolving investor perspectives underscore the continued importance of monitoring ESG considerations and their potential impact on investment opportunities and risks. “



Michael J. Birnbaum

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