Global investors' appetite for green assets keeps growing, survey finds

Companies are under greater pressure to explain their climate strategies as more investors are choosing to invest in greener assets.

An average of 68 percent of global institutional investors said they intend to add more environmentally friendly investments to their portfolios, with Europe having the strongest appetite for greener options at 97 percent, followed by the Americas (85 percent) and Asia (68 percent), according to a recent study commissioned by HSBC. 

The Middle East registered the weakest willingness at 19 percent, the only region to experience a decline this year.

The research, which involved 1,000 companies and institutional investors from around the world, found that half of the investors surveyed regard the current disclosure levels surrounding green credentials as “highly inadequate”.

Today, one in two companies has an environmental strategy, but not all of them are actively disclosing it. Europe again leads the way at 64 percent disclosure of company strategies and current levels of cleaner development, but it is Asia that records the biggest year-on-year rise from 9 percent in 2016 to 28 percent this year, the report said. On top of that, almost half of the Asian companies surveyed are increasing their levels of disclosure.

Pressure from investors and regulators are two main drivers for the enhanced transparency of environmental impact, the survey noted. However, some companies are discouraged from doing so due to a lack of clear competitive advantage regarding the raising of funds.

“The global transition to a low-carbon, clean energy economy is now firmly underway, yet companies and their investors are clearly travelling at different speeds,” said Daniel Klier, Head of Strategy and Global Head of Sustainable Finance at HSBC Group. He called for increased effort to improve “the availability, reliability and comparability” of climate-related information.

The program, conducted by industry research firm East & Partners, surveyed group treasurers, CFOs, CIOs and heads of portfolio and investment strategy from companies and institutional investors spanning Europe, the Americas, Asia and the Middle East.