The percentage of asset owners who see ESG regulation as a help is falling, while the percentage that see it as a hindrance is growing.
According to Morningstar’s second annual Voice of the Asset Owner Survey, the percentage of asset owners globally who say ESG regulations are either “a major help” or “a slight help” fell by 11 percentage points in the last year.
Regulatory costs are also a growing concern to asset owners, with only 18% of the 500 asset owners surveyed globally this year reporting that the minimal cost of regulations helped, down 20 percentage points from 2022.
Thomas Kuh – Head of ESG Strategy, Morningstar Indexes, said:
"We continue to see two sides of the coin for institutional investors around the regulation of ESG investing. While aspects of regulation help to bring about greater consistency and standards across markets, the growing cost and administrative burden of regulation is perceived as a hindrance."
Whether ESG regulations have become a help or a hindrance (%)
Arnold Gast – ESG Research Director, Sustainalytics, said:
“While our second annual survey of global asset owners confirms their commitment to ESG investing on a high level, the story gets more complicated when it comes to implementation. Particularly in Europe with its patchwork of cross-border regulatory regimes, ESG regulation can present quite a challenge. That's especially true for smaller asset owners with less scale and resources.”
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