Skip to content

Responsible investing has gathered enough momentum to reach the mainstream. What is less clear is how advanced global institutional investors are in the process of integrating ESG principles into their investment decisions.

To find out, Franklin Templeton undertook a comprehensive study of the progress of asset owners on their journey towards ESG adoption.

The Survey Says. . .

Responsible investing frameworks such as socially responsible investing, positive screening, impact and thematic investing, and the integration of environmental, social and governance (ESG) principles have been applied to professionally managed assets in various forms for several decades. Franklin Templeton itself has long been committed to responsible investing and the application of ESG criteria in its investment processes. Responsible investing has now gathered enough momentum to reach the mainstream. 

What is less clear is how advanced institutional investors are in the process of integrating the principles of ESG into their investment decisions. To find out, Franklin Templeton partnered with NMG Consulting to undertake a comprehensive study of the progress of asset owners in this field. The global ESG study was designed to map the complete adoption journey, with a focus on investors already implementing some form of ESG considerations. NMG met senior professionals at institutional and wholesale investment companies in 21 markets, representing around $20 trillion in assets.

Four themes track the way asset owners are adopting responsible investing and ESG considerations over time: 

1. Traction 

As ESG considerations gain acceptance, there is broad consensus on risk benefits, but differences of opinion on the impact on returns. 

2. Deepening 

As investors gain experience, initial responsible investing processes are supplemented with new methods and tools and extended to additional asset classes. 

3. Interpreting ESG factors 

E, S and G become interconnected, but shifts in priorities make E the primary focus. 

4. Filling in data gaps 

Unreliable and opaque data pose challenges for many asset owners, creating demand for more consistent and transparent information sources.

IMPORTANT LEGAL INFORMATION

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.

This site is intended only for EMEA Institutional Investors. Using it means you agree to our Anti-Corruption Policy.

If you would like information on Franklin Templeton’s retail mutual funds, please visit www.franklinresources.com to be directed to your local Franklin Templeton website.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.