In this report the authors assess current perceptions and activities around ESG integration and provide specific recommendations to companies and investors. Findings revealed that the integration of ESG criteria into mainstream investing continues to increase. Investors cite a number of factors driving integration.

For one, investors’ perceptions about the value of integration to achieving strong financial returns are becoming more positive. Investors also consider ESG performance as a proxy for a company’s strong management and a demonstration of the business’ ability to identify risks and plan for long-term, strategic growth.

Demand from clients for ESG integration is also on the rise, particularly from pension funds, and some investors view integration as a way to create competitive advantage and differentiate their firms. Finally, there is a growing sense among investors that at least some specific ESG factors, if not all, are becoming more material to the financial success of businesses.