Nearly 70% of fund managers still do not regard it as standard practice to factor environmental, social, and corporate governance initiatives into their investment decisions. That was the headline finding of a recent survey of 40 institutional investors undertaken by the advisory firm Maplecroft, of which I am a director, on behalf of logistics and transportation company TNT (TNT.AS) and the World Economic Forum.
Not surprisingly, what investors do factor into their decisions is proficiency in risk management. They prefer buying into companies that have clearly identified problems potentially affecting future performance—everything from the impact of carbon emission regulations to whether HIV/AIDS rates in some countries could limit the availability of staff. Investors look even more favorably at companies that have developed strategies to mitigate the identified risks.