NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, November 4, 2016

With environmental, social and governance (ESG) concerns becoming more pervasive among investors, Europe has taken an early lead in ESG adoption. But North America may not be far behind.

ESG investing may not be common in North America right now, but based on our recent ESG survey of more than 60 North American institutional asset allocators, it may be on the verge of joining the mainstream of investing.

Only 16% of respondents—professionals from retirement plans, endowments, foundations and gatekeepers encompassing roughly $500 billion in assets under management—said they currently have a specific ESG allocation. But when we asked them to consider the next one to three years, more than half of the respondents said that ESG considerations would become a bigger priority in manager selection.