Daniel McHugh, CEO.
Aviva Investors has launched the fifth edition of their award-winning annual Real Assets Study and have taken a deep dive into investor attitudes towards sustainable real assets.
The Study has canvassed the views of 500 institutional investors — drawn from the UK, Europe, North America and Asia Pacific region, with US$3.5 trillion of assets under management collectively with 125 APAC (incl. 25 Australian) institutions included.
This story comes as responsible investment shifts from the margins to the mainstream and global debates surrounding the trade-off between achieving ESG impact and financial returns ensue.
Key findings
Asia-Pacific focus
- The use of real assets to make a positive ESG impact has climbed, with 31% of APAC investors naming positive ESG impact as a primary reason for allocating to real assets for 2023,
- this has risen, up from 22%, three years ago.
- Our region’s investors are more becoming increasingly more receptive to strategies with a pure ESG real asset focus, than a returns-led approach.
- Compared to Europe and North America, APAC investors are also most open to pure ESG funds or strategies which focus on net zero/decarbonisation.
Our region’s commitment to ESG drives results:
- APAC institutions report the strongest intended commitment to a net-zero future,
- however, there is considerable work to achieve this: only 15% of APAC respondents are already reporting on their progress to net zero.
Global view
- Almost two-thirds of organisations plan to increase their allocations to real assets in the next two years.
- More than nine in ten (93%) of global institutional investors actively consider ESG and sustainability in their real assets investment decisions, with 17 per cent considering it a critical factor.
- 56% of institutions were unsure or lacking confidence in their ability to meet their long-term net-zero and sustainability commitments.
- 46% believe direct investment is the best method for gaining exposure to real assets.
- 47% reported strategies with ESG/sustainability targets were of most interest when investing in sustainable real assets.