Renewables projects are the main focus of real asset investors looking to boost returns from sustainable investments, according to a report by Macquarie Infrastructure and Real Assets (MIRA).
The ‘MIRA ESG (environmental, social and governance) Survey’ found 29% of ESG strategies by investors focussed on clean power.
This was followed by environmental impacts with 20% and the social impact of the investment with 17%.
Macquarie surveyed 150 institutional investors with combined assets under management of about $20 trillion.
Some 91% of those polled said they are looking to intensify the focus on sustainability over the next five years.
For the previous five years, the figure was only 58%.
The report also reveals that the move towards sustainable investing is being at least partly driven by the sector’s search for enhanced returns, with 78% of respondents agreeing that good sustainability strategies improve investment performance.
Macquarie Asset Management client solutions group head Phil Peters said: “Investors in the real asset sector have reached an inflexion point, with a growing consensus agreeing that sustainability strategies can be pursued whilst delivering value for investors and driving positive change in communities.
“To harness this exciting opportunity, our industry needs to bridge the ESG skills gap and significantly improve measurement and reporting tools.”
The report found that the largest barrier to making ESG investments is lack of in-house expertise.
Only 24% from the Americas and 21% in Asia had a dedicated ESG function, Macquarie said.
This compares to 72% from Europe, the Middle East and Africa and 71% from Australia.