In a report titled “The Continued Maturation of Fixed-Income ESG Investing,” released by Coalition Greenwich, a division of CRISIL, on April 4th, 2023, it is stated that the ESG investing industry is evolving, but is not without its flaws. Investors have varying goals and preferences for ESG products, which has led to a demand for greater access to ESG information and investment options.
While several investors are planning to allocate more funds towards ESG bonds, yield is the most important attribute driving investment in fixed-income investments.
Coalition Greenwich conducted interviews with 111 senior buy-side fixed-income professionals globally between July and August 2022 to gain a better understanding of the market participants and the likely path forward for ESG’s impact on this market. The study included portfolio managers, traders, and analysts, who were asked questions about the importance of ESG, the current challenges in the market, and how firms plan to respond to ESG in fixed income.
The topic of ESG has become increasingly prevalent in the asset management industry. However, there are inconsistencies surrounding taxonomies, data, and regulation that are affecting the investment process. Fixed-income investors are interested in incorporating ESG criteria into their investment decision-making but face obstacles such as difficulties in acquiring necessary data.