Majority of portfolio managers unable to see performance attribution of ESG Factors

Almost three quarters (71 per cent) of portfolio managers are currently unable to view the performance attribution of ESG investment factors, according to new research published by RiskFirst, a Moody’s Analytics company.

The research, which looks at portfolio managers’ ability to see the impact on investment performance of ESG factors alongside traditional factors, also shows that only 15 per cent have complete visibility of ESG factors for performance analysis, while a further 15 per cent said they can view ESG factors, but only on a limited basis.

The findings align with rising demand among investment managers for better visibility of drivers behind portfolio performance in real time.

“Having a consistent, accurate—and customisable—view of performance of both ESG and traditional factors is crucial for investment managers, to help them identify their performance drivers. It’s all about enabling better insight to discover new opportunities and for clear performance communication with the end-investor,” comments Owais Rana, US Business Development at RiskFirst.

Matthew Seymour, CEO of Risk First, adds: “With seismic shifts in investor demand, coupled with rising regulatory pressure, investment managers must adapt to meet ESG preferences of their clients and regulators or risk being left behind. As an increasingly attractive investment option, the importance of having the right tools in place to understand both ESG and traditional factors cannot be overstated.”