A new report by HSBC has revealed a growing regional divergence in how global investors approach sustainability, with Asia and Europe leading the charge.
The HSBC Sustainability Sentiment Survey, which was conducted between 21 May and 4 June, garnered responses from 144 professionals working in the financial services industry, who together represent around $4.9 trillion in assets across 104 institutions.
It says that there is a ‘widening gap’ between those investors that continue to prioritise sustainability, and those that don’t, with commitment to sustainability increasing among those at the top end.
When asked to state on a scale of one to ten about the level to which they are incorporating sustainability into investment decision-making – where 0 is ‘not at all’ and 10 is ‘completely’, 55% fell between 0 and 6, with 13% opting for 7 or 8 and 28% saying 9 or 10.
Region to region
While a growing number of firms have chosen to introduce a global approach to incorporating sustainability, the results also show regional differences, with Europe and Asia displaying deeper integration of sustainability strategies, whereas North America trails.
‘We believe this is unsurprising when considering political divergences and sustainability pushback,’ HSBC noted.
Elsewhere, investors are still divided on the usefulness of disclosures and reporting, with those describing new disclosure rules as ‘very helpful’ on the rise, while the number of those that don’t find them helpful has declined.
Transition funding
Looking to the future, European investors foresee a greater role for private credit in financing transition funding, while North American respondents anticipate more government and institutional backing.
‘The survey suggests a rapidly changing and uncertain world with significant divisions in incorporation and engagement,’ HSBC noted. ‘However, this isn’t simply a pro- or anti-sustainability story – it’s about evolving to ensure a successful transition for stakeholders while maintaining integrity, consistency and transparency.’ Read more here.
