Investors are looking for actionable data to assess ESG investment products
  • Asset managers are pumping out ESG-related information that is not focused on what investors want to see, says a communications company.
  • A search engine and social media survey shows investors are looking for issues including ESG measurement metrics and supply chain transparency.
  • Financial firms are looking to cash in on a growing ESG investment product market. Sustainable investing assets in several major markets including Europe and the U.S. reached $30.7 trillion in 2018.

Asset managers are putting out a deluge of information on environmental, social and governance matters, but a lot of it is not focused on what ESG investors are most interested in hearing about, says a communications firm.

Peregrine Communications, which specializes in the marketing needs of financial companies, conducted an Internet search engine and social media survey that shows global searches for ESG related topics rose by 63% in 2019, while social media engagement on sustainability matters rose 36%. Based on the data, investors want more actionable information and less generic fluff, according to the company’s report.

Financial firms are underdelivering information on critical areas of interest for investors, such as ESG-measurement metrics and supply chain transparency, while saturating the airways with marketing materials on matters including renewable energy and governance, says Josh Cole, a vice president and head of analytics at Peregrine Communications.

“There is way more content in Tier 1 asset management media on the topic of governance than there is organic search interest,” Cole told Karma.

In recent years, ESG and impact investing have become hot topics among people who are looking to make investments that align with their values and want to make the world a safer and cleaner place, say analysts.

Sustainable investing assets in major markets such as Europe, the United States, Canada, Japan, and Australia and New Zealand grew by 34% over the course of two years to reach $30.7 trillion in 2018, a figure that is expected to rise, according to the Global Sustainable Investment Alliance, an umbrella organization of sustainability stakeholders. 

Financial firms that want a piece of the do-good investment pie have ramped up their product offering and marketing materials in the media by 67% in the last year, but companies should focus on being authentic and stick to their expertise to reach investors, says Peregrine’s report.

“What we see far too often are firms desperately trying to say something in the ESG context without really being any good at it and you always regret that,” Cole says.

Investors are watching and have proven sensitive to greenwashing — a term used to describe products that don’t accomplish the intended ESG goals. Last year, BlackRock Inc., the world’s largest asset manager, was accused by investors of not being transparent about its fossil fuel investments while touting its ESG related products, according to the Financial Times.

BlackRock denied the charge and early this year the company joined Climate Action 100+, a group of investors that urges companies to help fight climate change.

Asset managers can draw lessons from firms that have run afoul of ESG investors, says Peregrine.

“Messaging is only good when it’s actually authentic. There has to be some bigger truth that everyone can buy into,” Cole told Karma. “If the underlying reality does not connect with that, you are going to struggle.”