How Long Term Investors are Prioritising Sustainability

More and more investors are prioritising a company's ethical and sustainability score - believing it will lead to long term positive returns

Jon Hale 18 July, 2016 | 3:45PM

What percentage of investors do you think would say that a company’s sustainability performance is materially important to their investment decision-making? Even considering the growing interest in sustainable investing around the world, I might have guessed somewhere around one third, assuming that even among those who embrace sustainable investing, some are values-oriented or impact-oriented and just hope to achieve competitive financial benefits from investing that way. Furthermore, I might have guessed that a decent-size group remains altogether sceptical of any connection whatsoever between sustainability and materiality.

Instead, the results were a stunning 90% positive to 10% negative in a recently-released survey conducted by the MIT Sloan Management Review and Boston Consulting Group. Nine in 10 respondents, all professional investors, agreed – at least “to some extent” – with the following statement: “A company’s good sustainability performance is materially important for investors when making investment decisions.”

Does a company's sustainability rating matter to investors

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About Author

Jon Hale  Jon Hale is a consultant with Morningstar Institutional Investment Consulting.

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