EUROPE - Responsible investment has not hurt returns, according to a report by UNEP & Mercer.
The report showed those which invested responsibly or incorporated environmental, social and corporate governance (ESG) factors into investment decisions did not have to give up returns.
The study also explored the links between different approaches to responsible investment and investment performance.
Tim Gardener, global head of Mercer's investment consulting business, said: "The majority of Mercer clients want to make sure that integrating ESG won't hurt returns and will help manage downside risk. This report goes some way towards establishing that.".
The report reviewed key academic and broker research on ESG factors and analysed 20 pieces of academic work and 10 key broker studies.
Overall, the report concluded that taking wider factors into account in the investment management process, such as ESG factors, did not appear to bring a performance penalty.
As with other approaches to investment, factors such as manager skill, investment style and time period were integral to investment performance.
The approaches highlighted within the report also demonstrated responsible investment could be implemented across a variety of investment styles. However, genuine ESG analysis needs to be clearly distinguished from simple automatic exclusions.
The report followed a survey released last week by the Responsible Investment Association Australasia (RIAA) which also said investments taking environmental, social, ethical or governance issues into account outgrew mainstream investing by more than double last year.
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