Global investment managers expect ESG elements to play a much smaller role in their portfolios over the next one-to-three years than earlier surveys suggested, a new report by the Index Industry Association (IIA) has found. The fourth annual Survey of Global Asset Managers found just 27.5% of asset managers expect their portfolios to contain ESG elements in 2025, rising to 33.9% in 2027. This dramatic fall on the last survey, when the figures were 48.2% for 2023 and 57.4% for 2027, was ascribed to managers being “overoptimistic” about the path of ESG investing previously. Still, more than half (51%) of respondents said sustainable investing was the topic most frequently mentioned by the firm over the last year, while 39% considered it an opportunity for the business. Only 17% said it was a challenge. UK and German asset managers were among the most bullish about the outlook for ESG investments, with 56% and 47% respectively considering it an opportunity. US managers were the least interested, with just over 30% listing it as an opportunity. The survey also focused on attitudes to AI and the rising prominence of private markets. It found managers were “enthralled” with the opportunities of generative AI, with two-thirds listing it as the topic raised most frequently by their firms and colleagues over the past 12 months. But they were divided over whether private markets were an opportunity (37%) or a challenge (29%).
