Sustainability
Institutional Investor Study 2021
Explore the 2021 results here

Marketing material for
professional clients only

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

About the Study
Schroders Institutional Investor Study analyses theinvestment perspectives of 750 global institutional
investors on the investment landscape, private assets
and sustainability.
The respondents represent a spectrum of institutions,
including corporate and public pension plans,
insurance companies, official institutions, privatebanks, endowments and foundations, collectively
responsible for $26.8 trillion in assets. The research
was carried out via an extensive global survey during
February and March 2021.
The 750 institutional respondents were split as follows:
204 in North America, 275 in Europe (including South
Africa), 205 in Asia Pacific and 66 in Latin America.
Respondents were sourced from 26 different locations.

ENVIRONMENTAL ATTENTIONENDURING CHALLENGES

Real world outcomes
and tangible results havebecome a key priority

Environment and climatechange retain the top spots
for thematic fund andengagement interests

Institutional investors
continue to find sustainable
investing challenging

54%

64%

80%

say positively impacting
society and planet is their key
driver for sustainable investing

believe engaging on environmental
issues such as climate change or
the use of fossil fuels are the mostimportant stewardship topics

of global institutional investors
find sustainability challenging

57%

47%

59%

believe “successful” engagement
equals real world outcomes that candemonstrate a measurable improvement for company’s stakeholders

wish to invest in funds that are
specifically aligned toenvironmental themes

cite greenwashing as
the major challenge tosustainable investing

Click here to find out more about the Study2
SchrodersInstitutional Investor Study 2021

| Sustainability

2

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

A message from our Global Head of Sustainable Investment
Sustainable investing has grown significantly in recent
years and the resulting attention from investors,
regulators and asset managers has been inevitable.
Added to the mix is the impact of Covid-19, which has
affected all aspects of our lives with sustainable investing,no exception. The message from this year’s Institutional
Investor Study is clear. Covid-19 has intensified the
spotlight on sustainable investing. Investors are focusedon ensuring their assets are being directed in the mostsustainable ways.
Encouragingly, performance concerns about investingsustainably have fallen significantly but challenges
remain. Greenwashing continues to be a core concern anddoubts persist about the ability to measure and manage
risk when investing sustainably.
Furthermore, institutional investors want to know more
about their sustainable investment options. They needclarity on the goals and strategies fund managers employ
and ways to track their performance. Increasingly, many
also want to know the impacts their investments deliver.
Asset managers cannot afford to approach sustainable
investing as a compliance exercise. We need to have avery clear idea and commitment of why and how weapproach sustainable investment, what our clients wantfrom us and then apply it to our portfolios. This will3
SchrodersInstitutional Investor Study 2021

| Sustainability

require new ways of thinking and a proactive approachto asset ownership to drive change.

If we look at the top responses to the Study globally,
there is a greater degree of similarity across the world
than perhaps would have been anticipated. While thesustainable investment market may be at different levelsof development in different regions, investor sentiment,
perceptions, concerns, and priorities are similar.
For example, most investors are placing an increased
emphasis on the impact their investments have on people
and the planet no matter where they are in the world.
The fact is that, despite its recent growth, sustainable
investing is still in its teenage years. We need to ensurethat any concerns or challenges our clients may perceive
when it comes to investing sustainably are completely
allayed, through ever clearer reporting and disclosures.
But it is of course encouraging to see that investors’
long-held performance concerns about sustainable
investing continue to subside, we have argued for many
years that investing sustainably with a strong focus onrobust returns should not be mutually exclusive, indeed
thoughtful and considered approaches to sustainability
are at the heart of delivering long-term investment
returns.

Andrew Howard
GLOBAL HEAD OF SUSTAINABLE INVESTMENT

3

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

Covid-19 has accelerated
sustainability's importance

ENVIRONMENTAL ATTENTION

How has the Covid-19 crisis impacted your view on therole of sustainable investing within your organisation?

2020 was a truly transformative year. It fundamentallychanged the way we live our lives but was also the year
when we saw systematic change in how investors feel
about sustainability.
Since the first Institutional Investor Study in 2017, wehave seen a consistent growth in the uptake ofsustainable investing. Covid-19 has accelerated thistrend. In Europe, views were particularly strong, with
62% now attaching a greater significance tosustainable investing as a result of Covid-19, whereas
more than half of North American and Asia-Pacificinvestors see the pandemic as having no impact on
their views on sustainability.

2%
7%
41%

Europe36%(incl South Africa)

North
America

1%

62%
52%
48%

AsiaPacific

51%

3%

56%

52%

ENDURING CHALLENGES

Latin
America

41%

Global institutional investors
view the role of sustainable
investing within theirorganisation as more importantbecause of Covid-19

4
SchrodersInstitutional Investor Study 2021

Significantly more + More important| Sustainability

No impact

Significantly less + Less important

4

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

COVID-19 HAS ACCELERATED SUSTAINABILITY’S IMPORTANCE

Societal concerns have always been

It is no surprise that the focus of

The flows we have witnessed into

an important aspect of ESG for North
American investors. As lockdown

European institutional investors onsustainability has increased further

ESG funds over the last year show aclear upward trend for sustainability

took hold, the working conditions ofessential workers became part of thein the context of the pandemic,
especially within the EU. The

across Asia-Pacific. In last year’s
survey, 70% of respondents indicatedmainstream conversation. Therefore
it is no surprise to see that 41% ofregulatory landscape is heavily focusedon sustainable finance and the EU-wide

they expected sustainable investing
to become more important over the

North American investors feel thatsustainable investing has become

Covid recovery plan, initiated in 2020and now approved by all member

next five years. While Covid-19 has
accelerated this importance for many

more important. Unlike global peers
who tend to be more focused onstates, is also oriented towards a moresustainable economy. In this context,

institutions, the overall trend is clear.
Regulation, consumer preferences,environmental issues, consistently
throughout the survey, North American

the percentage of EU respondents
attaching even greater significance torisks and opportunities are driving
the need to invest with impact.

investors placed a greater focus on
supporting the needs of workers insustainable investing as a result of thepandemic reaches 74%. In countries

The growing momentum behindsustainability in APAC will certainly be

areas such as healthcare benefits,
wages, workplace safety and diversity.

like Italy, Sweden and France, it is even
above 90%.

one to watch over the coming years.

Sarah Bratton Hughes

Nathaele Rebondy

Lily Choh

HEAD OF SUSTAINABILITY NORTH AMERICAHEAD OF SUSTAINABILITY EUROPE

COUNTRY HEAD SINGAPORE

5
SchrodersInstitutional Investor Study 2021

| Sustainability

See the breakdown of
how Covid-19 has impacted
different organisations’views on sustainability
Focus point

5

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

FOCUS

How has the Covid-19 crisis impacted your view on the role of sustainable investing within your organisation?

52%

Global45%

3%

Official institutions

70%

23%

Private bank

67%

33%

57%

Insurance

7%

38%

Foundation50%

Corporate pension plan

49%

49%

2%

Public or government pension plan

47%

51%

2%

Endowment

40%

5%

40%

Significantly more + More important

58%
No impact

10%2%Interestingly, Official Institutions (which includes sovereign wealthfunds, central banks and national pension plans) have seen themost change over the last 12 months, with 70% expressing thatsustainability has become more or significantly more importantsince Covid-19. Private banks have expressed similar sentiment(67%). One reason for this may be that Official Institutions are set
to play a key role in national initiatives to ‘build back better’
following the economic slowdown caused by the ongoingpandemic. In particular, the recently increased policy and financial
support interventions by central banks makes them pivotal tonational and global economic recovery initiatives centred on
renewed climate risk reduction and incorporation of ESG
considerations.

Public pension schemes (47%) and endowments (40%) have seen
the least change, most likely because they are generally more“sticky” in their investment adjustment process. They have been
experiencing a growing interest in sustainable investing, but theirprocesses may look different and less linear compared to otherinstitutions where client demand is a key determinant.

Significantly less + Less importantContinue

6
SchrodersInstitutional Investor Study 2021

| Sustainability

6

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

Real world outcomes
and tangible results havebecome a key priority
Drivers of sustainable investing

ENVIRONMENTAL ATTENTION

What is driving your sustainability investment focus?

54%

58%
52%

7
SchrodersInstitutional Investor Study 2021

| Sustainability

49%
43%

Investor appetite and knowledge around sustainability
are becoming more sophisticated. Data suggests
investors are beginning to move away from ‘having’ toinvest sustainably (because of regulatory requirements
or corporate alignment) towards ‘wanting’ to make an
impact with their investments.
In this year’s results, more than half of institutional
investors have highlighted that their primary driver toinvest sustainably is the desire to positively impact
society and the planet (54%), overtaking aligning tocorporate/internal values (52%); last year’s top choice.
Regulatory and industry pressure (43%) continues to be
an important motive, particularly as we have seen an
unprecedented number of new regulations andstandards emerge in recent years.

ENDURING CHALLENGES

42%
35% 36%

33%

35%
27%
19%

Positively impact Aligning tosociety andcorporate /planet through internal values
sustainable
investments*

Regulatory
and industry
pressureRiskmanagement**These options were not included in 2020.
Select all that apply. Multiple answers allowed. Option “None of the above” not displayed.

Potential forhigher returns

Memberpressure

Education
and awarenessfrom asset
managers

2020

2021

7

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

REAL WORLD OUTCOMES AND TANGIBLE RESULTS HAVE BECOME A KEY PRIORITY

Making an impact throughsuccessful engagement
This demand for making positive impacts translates
not only to the investment decision making process ofwhich companies to hold, but also the actions taken
during the holding period.

This is evident in investors’ responses to what theyclassify as “successful” engagement. 57% believe thatsuccessful engagement is a real world outcome whichshould demonstrate a measurable improvement for acompany’s stakeholders (customers, communities,
employees, environment, regulators & governments,
suppliers). This is closely followed by transparent
reporting (56%). For 46%, direct impact on theinvestment case as a result of engagement is also
equal to success.

What would you class as “successful” engagement in regards
to influencing companies to make sustainable changes?

Real world outcome demonstrating ameasurable improvement for a company’s
stakeholders*| Sustainability

52%

Achieving more transparent reporting

56%

Engagement insight or outcome is directlyreflected in the investment case*

46%
43%

Consistently voting against companies inorder to drive change

Public statements against companies*These options were not included in 2020.
Select all that apply. Multiple answers allowed. Option “None of the above” not displayed.

8
SchrodersInstitutional Investor Study 2021

57%

40%

25%
21%

2020

2021

8

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

REAL WORLD OUTCOMES AND TANGIBLE RESULTS HAVE BECOME A KEY PRIORITY

This year’s Study has shown that people want tomeasure and quantify the impact on theirinvestments. We believe the future of assessing
investment performance is going to be three
dimensional, with the emphasis being on risk,
return and impact.
This is why active ownership is so critical, because
this is where the dialogue, engagement and thevoting happens. It is through this process that we
can gather more insights and information about acompany and what the risks and impact ofinvesting in that company actually are.

Hannah Simons

See the regional breakdown
for how institutional
investors classify
successful engagement
Focus point

HEAD OF SUSTAINABILITY STATEGY

9
SchrodersInstitutional Investor Study 2021

| Sustainability

9

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

FOCUS

What would you class as successful engagement in regards to influencing companies to make sustainable changes?

North America

EuropeLatin America

Asia-Pacific(incl South Africa)

Real world outcome demonstrating a measurable
improvement for a company’s stakeholders

64%

63%

58%

42%

Achieving more transparent reporting

54%

56%

59%

56%

Engagement insight or outcome is directlyreflected in the investment case

43%

42%

53%

52%

Consistently voting against companies
in order to drive change

37%

37%

55%

40%

Public statements against companies

13%

28%

21%

18%
Continue

Select all that apply. Multiple answers allowed. Option “None of the above” not displayed.

10
SchrodersInstitutional Investor Study 2021

| Sustainability

10

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

Inclusive approaches toimplementing sustainability
continue to be popular
Integration continues to be the preferred approachto implementing sustainable investing for global
institutional investors, with 67% agreeing this to becase. This is followed by positive screening at 58%.
The data is clear, inclusive approaches are
increasingly being viewed as an important aspect ofachieving or driving change, rather than simply
divesting.
The increase in thematic investing and impact
investing this year reinforces the idea that investor
appetite for sustainability is growing and becoming
more sophisticated. Investors are seeking out specificenvironmental and social themes and want to maketangible impacts through the way they invest.

67%

11
SchrodersInstitutional Investor Study 2021

| Sustainability

ENDURING CHALLENGES

What is your preferred approach to implementing sustainable investments?
2019**

2020*

2021*

ESG integration into
the investment process

64%

67%

67%

Positive screening

44%

61%

58%

Thematic investing

38%

44%

48%

Active company
engagement

38%

59%

45%

Negative screening

53%

36%

43%

34%

38%

Impact investing***highlight ESG
integration into theinvestment process as
their preferred approach

ENVIRONMENTAL ATTENTION

Please rank the following in order of preference. *2021 & 2020 - Rank 1 + Rank 2 + Rank 3. **% Yes, Multiple answers allowed. ***Not an option in 2019.

11

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

Environment and climatechange retain the top spots
for thematic fund andengagement interests

ENVIRONMENTAL ATTENTION

Investment managers and asset owners are often able to engage with and influence
the behaviours of the companies that they invest in. Which of the following do you
believe is important to engage on?
Environment - Attention to environmental issues

64%(e.g. climate change, emissions, use of fossil fuels)

Engagement
Concern over environmental and social risks has been
rising. This was made clear by the 2021 World Economic
Forum’s global risks report, which annually ranks the top
five global risks in terms of impact. A decade ago,
economic concerns dominated the top risks. In this year’s
update from WEF, four of the five most likely risks
identified by business leaders are environmental. The otheris social, in the unsurprising form of infectious diseases.

Employees - Treatment of staff / diversity of theThis sentiment is evident in this year’s Study as 64%
believe engaging on environmental issues such as climatechange or the use of fossil fuels are the most importantstewardship topics. In the midst of Covid-19, where many
lost their jobs, employee management (61%) unsurprisingly
came in as a close second, which includes treatment ofstaff and diversity of the workplace. Ensuring thatcompany strategy and executive remuneration is alignedwith sustainability, “Management”, comes third at 60%.

Suppliers - How the company treats its suppliers

12
SchrodersInstitutional Investor Study 2021

ENDURING CHALLENGES| Sustainability

61%

company's workforce (e.g. gender/ethnicity/sexuality/
socio-economic background)Management - Ensuring that strategy and60%

executive pay are aligned with a sustainable future

Communities - Impact on communities including

52%

human rights (e.g. consultation, minimising environmental
risk to local communities)(e.g. paying living wage, promoting ethical trade)

Customers - Responding to customer needs in asustainable way (e.g. product safety, healthier & moreenvironmental friendly products)

49%
47%

Select all that apply. Multiple answers allowed.

12

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGESENVIRONMENT AND CLIMATE CHANGE RETAIN THE TOP SPOTS FOR THEMATIC FUND AND ENGAGEMENT INTERESTS

See the regional breakdownof what institutional investors
believe are the most importantengagement issues

While the environmental aspect of ESG has longenjoyed a high profile, the Covid-19 crisis isturning the spotlight on the social element, suchas companies’ treatment of their employees,
suppliers and customers. At Schroders we
recognise that companies do not operate in a
vacuum, they are part of the societies fromwhich they draw their employees, to which theysell their products and under whose laws they
compete. The crisis has exposed thosecompanies that approach shareholder value as atrade-off against the interests of a wider groupof stakeholders, and those which recognise that
long-term, sustainable shareholder returns
depend on strong stakeholder relationships.
Andrew Howard

Focus point

GLOBAL HEAD OF SUSTAINABLE INVESTMENT

13
SchrodersInstitutional Investor Study 2021

| Sustainability

13

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

FOCUS

Investment managers and asset owners are often able to engage with and influence the behavioursof the companies that they invest in. Which of the following do you believe is important to engage on?
When we look at the regional results, there are someinteresting differences.

North America

EuropeLatin America

Asia-Pacific(incl South Africa)

Environment

62%

71%

50%

60%

Employees

61%

63%

56%

58%

Management

55%

66%

45%

61%

Communities

54%

53%

50%

49%

Suppliers

53%

47%

44%

50%

Customers

43%

51%

59%

41%

The focus on the environment was even more
pronounced with European investors (71%). Whilecountries such as Denmark, France, Netherlands andthe UK have climate as their most important focus area,other countries such as Germany and Switzerland put
more focus on corporate governance. Effective
employee treatment is the important engagement
theme for North American investors (61%).
For Asia-Pacific investors, “Management” is a toppriority (61%). Historically, governance issues havebeen a primary ESG concern for Asia-Pacific investors,
but it is encouraging to see strong responses among
the E & S options, reflecting the growing momentum
sustainability is having across the region. For Latin
American investors, it was a focus on meetingcustomers’ needs in a sustainable way (59%).

Continue
Select all that apply. Multiple answers allowed.

14
SchrodersInstitutional Investor Study 2021

| Sustainability

14

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGESENVIRONMENT AND CLIMATE CHANGE CONTINUES TO BE TOP OF MIND FOR FUND DEMAND AND ENGAGEMENT TOPICS

Appetite for environmental andbroad brush sustainable funds
The environmental focus is additionally seen in investors’
choice of sustainable funds, with 47% highlighting theirpreference for a sustainability fund that aligns withenvironmental issues. Broad-brush sustainability funds still
appeal with 39% saying they would like to invest in suchproducts. Institutional investors also prefer funds withgoals related to sustainable infrastructure (38%) and
responsible consumption (37%).
While overall rankings haven't changed dramatically sincelast year, it is clear there is growing appetite across theboard for sustainable themed funds as percentages werehigher across all categories in comparison to last year.

47%
40% in 2020

A fund that aligns
with a specificsustainability goalsuch as attention toenvironmental issues

15
SchrodersInstitutional Investor Study 2021

| Sustainability

When considering making an investment in a sustainable fund where would you liketo invest?
In a broad sustainability
fund which focuses on a
range of sustainability issues

A fund that aligns with a specificsustainability goal such assustainable infrastructure

A fund that aligns with a specificsustainability goal such as
responsible consumption

39%

38%

37%

33% in 2020

34% in 2020

30% in 2020

A fund that aligns with a specificsustainability goal such as
health and wellness

A fund that aligns with a specificsustainability goal such as
inclusion

A fund that aligns withanother sustainability
goal (or goals)

37%

29%

25%

29% in 2020

24% in 2020

22% in 2020

Multiple answers allowed. Option “None of the above” not displayed.

15

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

Challenges remain forsustainable investing
Although sustainability is now a major consideration
in institutional investors’ asset allocation, this year’s
results have shown that the degree of complexity
around sustainable investing is still relatively high.
It is interesting to note that the five countries where
institutional investors don’t find sustainable investing“very challenging” are all European (notably France
and Sweden). This is consistent with a region where
sustainability matters have been an area of focus fora number of years already.
Measuring and understanding social andenvironmental issues through an investment lens isstill very new to many investors. Combining that withthe lack of consistency in definitions, data andmethodologies, it is unsurprising that 80% still findsustainable investing at least somewhat challenging.

ENVIRONMENTAL ATTENTIONENDURING CHALLENGES

How challenging do you find investing in sustainable investments?

13%

19%
14%

8%
Europe(incl South Africa)

14%

North
America

65%
57%

18%
AsiaPacific

2%

32%

64%
Latin
America62%

80%

of investors globallyfind sustainability
challenging

16
SchrodersInstitutional Investor Study 2021

| Sustainability

Option "I do not invest in sustainable investments" not displayed.

Not challenging

Somewhat challenging

Very challenging

16

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

CHALLENGES REMAIN FOR SUSTAINABLE INVESTING

Greenwashing continues to be
the major hurdle
Investor concern about greenwashing (59%) and thelack of transparency and data around sustainable
investing (53%) continue to be the main concerns for
successful sustainable investment adoption. Difficulty
in measuring and managing risk and worries on costhave also jumped considerably this year. Given the
speed at which ESG has grown in the market in recent
years, and some regulatory efforts yet to take full
effect, we believe the lack of consistent standards anddefinitions may be a key contributor to the 46% ofrespondents that selected this response.
Encouragingly, we have seen a consistent year-onyear decrease around performance concerns. Some
38% of institutions had performance concerns overinvesting sustainably, this was down on 45% a year
ago and a marked drop on the 51% recorded in 2018.
This is a further sign that investors are recognising thatinvesting sustainability does not have to come at theexpense of returns.

17
SchrodersInstitutional Investor Study 2021

| Sustainability

Which, if any, of the following specific factors do you consider a challenge of investingin sustainable investments?

Greenwashing1

Lack oftransparency
and reported data

Difficulty
measuringand managing risk

Performance
concerns

None ofthe above

Cost

60% 59%
53%
48%
40%

46%
35% 33%

48%

45%
38%

34%
20%

23%
12%

2020 2021

2019 2020 2021

2019 2020 2021

2019 2020 2021

2019 2020 2021

5%

3%2019 2020 2021

1. Due to a lack of clear, agreed definitions of what sustainable investment is. Select all that apply. Multiple answers allowed.

17

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

CHALLENGES REMAIN FOR SUSTAINABLE INVESTING

The continued concern of greenwashing andlack of transparency highlights that as anindustry, we still have a long way to go to makeinvestors feel confident that they have all thetools and information to make informed
decisions. This is a new area for the investment

See the regional breakdownof the challenges institutional
investors are facing wheninvesting sustainably

industry and we need innovation to gain a better
understanding of these risks and provide new
ways to capture and quantify impact through aninvestment lens.

Hannah Simons

Focus point

HEAD OF SUSTAINABILITY STRATEGY18
SchrodersInstitutional Investor Study 2021

| Sustainability

18

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

FOCUS

Which, if any, of the following specific factors do you consider a challenge of investing in sustainable investments?

North America

EuropeLatin America

Asia-Pacific(incl South Africa)

Greenwashing

58%

63%

55%

57%

Lack of transparency and reported data

54%

56%

48%

52%

Difficulty measuring and managing risk

49%

37%

47%

54%

Performance concerns

47%

29%

35%

42%

Cost

35%

27%

32%

42%

None of the above

4%

3%

3%

3%
Continue

Select all that apply.

19
SchrodersInstitutional Investor Study 2021

| Sustainability

19

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

CHALLENGES REMAIN FOR SUSTAINABLE INVESTING

Assessing sustainability: in-house or outsource?
The previous chart highlighted the concern around the cost ofsustainable investments, with 34% stating it is a main challenge,
up from 20% in 2019. This may be linked to the popular use of third
party providers. 62% of investors use third party ESG ratings such as
MSCI and Sustainalytics to inform their sustainable investments,
and these services tend to be quite costly.
External data is also a key resource for investors as 48% use externalbenchmarks and indices and 37% use external performance data.
However, it is encouraging to see that 54% use in-house analytics,
with European and North American investors leading the way (59%and 53%).

What primary data sources do you use to
inform your sustainable investment decisions?

40%

Independent /specialised ESG
labels or verification

In-house analysis

37%

External
performance data

External benchmarks
and indices2%

None of the above

62%

Third party ESG ratings

54%

48%

(e.g. MSCI, Sustainalytics)

Sustainable investing requires new ways of thinking and aforward-looking approach, but third party ratings are often
backward-looking and opaque. We believe innovative proprietary
analysis is crucial to understand the risks and opportunities
linked to the environmental and social trends that will play out
over the coming decades. Stronger analysis leads to betterinformed investment decisions and potentially long-term value.

Select all that apply. Multiple answers allowed.

Claire Herbert
ASSOCIATE INVESTMENT DIRECTOR SUSTAINABILITY

20
SchrodersInstitutional Investor Study 2021

| Sustainability

20

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGES

On a sustainable investment report, what information would help you better understand /invest in that particular sustainable fund?

Transparency andimpact of the fund is
key to better understandsustainable results
Clear and transparent details of fund objectives, including
sectors or firms excluded or included is the type of
information more than half of investors (53%) consider
helpful. This information will help them understand andinvest in a particular sustainable fund. Details on how thefund contributes to specific sustainability goals (51%)
would also be valued. In addition, 48% mention theimpact the fund has on the environment.

Clear and transparent details of the fund objectives
including sectors or firms excluded or included

53%

How the fund contributes to specificsustainability goals

51%
48%

The impact the fund has on the environment (planet)
Whether the fund is performing better onenvironmental criteria than the benchmark

44%

Independent verification or labelling

40%

Whether the fund is performing better on social
criteria than the benchmark

39%

The impact the fund has on society (people)

The fund manager’s level of shareholder activism

37%
34%

Select all that apply. Multiple answers allowed. Option “None of the above” not displayed

21
SchrodersInstitutional Investor Study 2021

| Sustainability

21

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMESENVIRONMENTAL ATTENTIONENDURING CHALLENGESWorldwide institutional respondents

750
4

85
2
119

The respondents represents a spectrum of institutions,
including corporate and public pension plans,
insurance companies, official institutions, privatebanks, endowments and foundations, collectively
responsible for $26.8 trillion in assets. The research
was carried out via an extensive global survey during
February and March 2021.

locationsworldwide

institutional
respondents

About the Study
Schroders commissioned CoreData to conduct the
fifth Institutional Investor Study to analyse the world’s
largest investors’ key areas of focus and concern
including the macroeconomic and geopolitical climate,
return expectations, asset allocation and attitudes toprivate assets and sustainable investing.

26

12

3

102 3
12
13 827
22 34
13
11

18

36
24 16

19

40
26
9

71

21

The research was carried out via an extensive global
survey during February and March 2021.

22
SchrodersInstitutional Investor Study 2021

| Sustainability

22

COVID-19 & SUSTAINABILITYREAL WORLD OUTCOMES

Regional institutional respondents

North America(204)

Type of organisation

29%

Europe*Corporate pension plan

(275)

27%

37%

(66)

(205)

9%

27%

Assets under management

23%
Public or government
pension plan

Less than 1 billion
1 billion to less than 5 billion

Official
institutions

5 billion to less than 10 billion

Private bankAsia-Pacific

ENDURING CHALLENGES

3%
7%

Latin America

ENVIRONMENTAL ATTENTION

14%Life insurancecompany

7%Foundation

7%
Endowment

10%
Non-life insurancecompany

14%
24%
11%

10 billion to less than 50 billion

24%

50 billion to less than 100 billion

8%

100 billion to less than 250 billion

11%

250 billion to less than 500 billion

5%500 billion to less than 1 trillion

3%*Including South Africa

23
SchrodersInstitutional Investor Study 2021

| Sustainability

23

Important information

Marketing material for professional clients only.
Investment involves risk.
Any reference to sectors/countries/stocks/securities are for illustrative purposes only and not a recommendation tobuy or sell any financial instrument/securities or adopt any investment strategy.
The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, orinvestment recommendations.
Reliance should not be placed on any views or information in the material when taking individual investment and/or
strategic decisions.
Past Performance is not a guide to future performance and may not be repeated.
The value of investments and the income from them may go down as well as up and investors may not get back theamounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise.
Schroders has expressed its own views and opinions in this document and these may change.
Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy.
Insofar as liability under relevant laws cannot be excluded, no Schroders entity accepts any liability for any error oromission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise).
This document may contain “forward-looking” information, such as forecasts or projections. Please note that any
such information is not a guarantee of any future performance and there is no assurance that any forecast or
projection will be realised.
This material has not been reviewed by any regulator.
Not all strategies are available in all jurisdictions.
Schroders may record and monitor telephone calls for security, training and compliance purposes.
For readers/viewers in Argentina: Schroder Investment Management S.A., Ing. Enrique Butty 220, Piso 12, C1001AFB- Buenos Aires, Argentina. Registered/Company Number 15. Registered as Distributor of Investment Funds with the
CNV (Comisión Nacional de Valores). Nota para los lectores en Argentina: Schroder Investment Management S.A.,
Ing. Enrique Butty 220, Piso 12, C1001AFB - Buenos Aires, Argentina. Inscripto en el Registro de Agentes deColocación y Distribución de PIC de FCI de la Comisión Nacional de Valores con el número 15.

24
SchrodersInstitutional Investor Study 2021

| Sustainability

For readers/viewers in Brazil: Schroder Investment Management Brasil Ltda., Rua Joaquim Floriano, 100 – cj. 142
Itaim Bibi, São Paulo, 04534-000 Brasil. Registered/Company Number 92.886.662/0001-29. Authorised as an asset
manager by the Securities and Exchange Commission of Brazil/Comissão de Valores Mobiliários (“CVM”) according
to the Declaratory Act number 6816. This document is intended for professional investors only as defined by the
CVM rules which can be accessed from their website www.cvm.gov.br.
For readers/viewers in Canada: Schroder Investment Management North America Inc., 7 Bryant Park, New York, NY
10018-3706. NRD Number 12130. Registered as a Portfolio Manager with the Ontario Securities Commission, Alberta
Securities Commission, the British Columbia Securities Commission, the Manitoba Securities Commission, the Nova
Scotia Securities Commission, the Saskatchewan Securities Commission and the (Quebec) Autorité des marchés
financiers.
For readers/viewers in Israel: Note regarding the Marketing material for Qualified Clients or Sophisticated Investors
only. This communication has been prepared by certain personnel of Schroder Investment Management (Europe)
S.A (Registered No. B 37.799) or its subsidiaries or affiliates (collectively, ‘SIM’). Such personnel are not licensed by
the Israeli Securities Authority. Such personnel may provide investment marketing, to the extent permitted and inaccordance with the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management
Law, 1995 (the ‘Investment Advice Law’). This communication is directed at persons (i) who are SophisticatedInvestors (ii) Qualified Clients (‘Lakoach Kashir’) as such term is defined in the Investment Advice Law; and (iii)
other persons to whom it may otherwise lawfully be communicated. No other person should act on the contents oraccess the products or transactions discussed in this communication. In particular, this communication is notintended for retail clients and SIM will not make such products or transactions available to retail clients
For readers/viewers in Switzerland: For professional clients and qualified investors only, where appropriate. Issued
by Schroder Investment Management (Switzerland) AG, Central 2, CH-8001 Zürich, Postfach 1820, CH-8021 Zürich,
Switzerland. Enterprise identification number (UID) CHE-101.447.114. Authorised and regulated by the Swiss
Financial Market Supervisory Authority (FINMA)
For readers/viewers in the European Union/European Economic Area: Schroders will be a data controller in respectof your personal data. For information on how Schroders might process your personal data, please view our Privacy
Policy available at www.schroders.com/en/privacy-policy or on request should you not have access to this webpage.
Issued by Schroder Investment Management (Europe) S.A., 5, rue Höhenhof, L-1736 Senningerberg, Luxembourg.
Registered No. B 37.799

24Important information

For readers/viewers in the United Arab Emirates: Schroder Investment Management Limited, located in Office 506,
Level 5, Precinct Building 5, Dubai International Financial Centre, PO Box 506612 Dubai, United Arab Emirates.
Regulated by the Dubai Financial Services Authority. This document is not subject to any form of approval by the
DFSA. Accordingly, the DFSA has not approved any associated documents nor taken any steps to verify the
information and has no responsibility for it. This document is intended to be for information purposes only and it is
not intended as promotional material in any respect. This document is intended for professional investors only as
defined by the DFSA rules which can be accessed from their website www.dfsa.ae
For readers/viewers in the United Kingdom: Schroders will be a data controller in respect of your personal data. For
information on how Schroders might process your personal data, please view our Privacy Policy available atwww.schroders.com/en/privacy-policy or on request should you not have access to this webpage. Issued bySchroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 1893220
England. Authorised and regulated by the Financial Conduct Authority.

For readers/viewers in the United States: For financial professionals and consultant only. Schroder Investment
Management North America Inc., 7 Bryant Park, New York NY 10018-3706. CRD Number 105820. Registered as aninvestment adviser with the US Securities and Exchange Commission.
Note to readers/viewers in Australia: Issued by Schroder Investment Management Australia Limited Level 20, Angel
Place, 123 Pitt Street, Sydney NSW 2000 Australia ABN 22 000 443 274, AFSL 226473. It is intended for professional
investors and financial advisers only and is not suitable for retail clients.
Note to readers/viewers in Indonesia: This document is intended to be for information purposes only and it is notintended as promotional material in any respect. This document is intended for professional investors only as
defined by the Indonesian Financial Services Authority ("OJK"). Issued by PT Schroder Investment Management
Indonesia Indonesia Stock Exchange Building Tower 1, 30th Floor, Jalan Jend. Sudirman Kav 52-53 Jakarta 12190
Indonesia PT Schroder Investment Management Indonesia is licensed as an Investment Manager and regulated by
the OJK. This material has not been reviewed by the OJK.
Note to readers/viewers in Japan: Issued by Schroder Investment Management (Japan) Limited 21st Floor,
Marunouchi Trust Tower Main, 1-8-3 Marunouchi, Chiyoda-Ku, Tokyo 100-0005, Japan Registered as a Financial
Instruments Business Operator regulated by the Financial Services Agency of Japan (“FSA”). Kanto Local Finance
Bureau (FIBO) No. 90. Member of Japan Investment Advisers Association, The Investment Trusts Association, Japanand Type II Financial Instruments Firms Association. This material has not been reviewed by the FSA

25
SchrodersInstitutional Investor Study 2021

| Sustainability

Note to readers/viewers in Malaysia: This presentation has not been approved by the Securities Commission
Malaysia which takes no responsibility for its contents. No offer to the public to purchase any fund will be made in
Malaysia and this presentation is intended to be read for information only and must not be passed to, issued to, or
shown to the public generally. Schroder Investment Management (Singapore) Ltd does not have any intention tosolicit you for any investment or subscription in any fund and any such solicitation or marketing will be made by anentity permitted by applicable laws and regulations.
Note to readers/viewers in People’s Republic of China with QDII quota/MRF client and readers Hong Kong S.A.R.:
Issued by Schroder Investment Management (Hong Kong) Limited. Level 33, Two Pacific Place, 88 Queensway, HongKong. This material has not been reviewed by the Securities and Futures Commission of Hong Kong
Note to readers/viewers in Singapore: This presentation is intended to be for information purposes only and it is
not intended as promotional material in any respect. This document is intended for professional investors only as
defined by Securities and Futures Act to mean for Accredited and or Institutional Clients only, where appropriate.
Issued by Schroder Investment Management (Singapore) Ltd (Co. Reg. No. 199201080H) 138 Market Street #23-01
CapitaGreen, Singapore 048946. This document has not been reviewed by the Monetary Authority of Singapore
Note to readers/viewers in South Korea: Issued by Schroders Korea Limitedn26th Floor, 136, Sejong-daero,(Taepyeongno 1-ga, Seoul Finance Center), Jung-gu, Seoul 100-768, South Korea . Registered and regulated by
Financial Supervisory Service of Korea (“FSS”)This material has not been reviewed by the FSS
Note to readers/viewers in Taiwan: Issued by Schroder Investment Management (Taiwan) Limited 9F., No. 108, Sec.
5, Xinyi Road, Xinyi District, Taipei 11047, Taiwan. Tel +886 2 2722-1868 Schroder Investment Management (Taiwan)
Limited is independently operated. This material has not been reviewed by the regulators.
Note to readers/viewers in Thailand: This presentation has not been approved by the Securities and Exchange
Commission which takes no responsibility for its contents. No offer to the public to purchase any fund will be madein Thailand and this presentation is intended to be read for information only for professional investors as defined byregulations and it is not intended as promotion material in any respect. It must not be passed to, issued to, or
shown to the public generally. Schroder Investment Management (Singapore) Ltd does not have any intention tosolicit you for any investment or subscription in any fund and any such solicitation or marketing will be made by anentity permitted by applicable laws and regulations. UK002901

25

Sustainability – Institutional Investor Study 2021

Go back

Start again