The Covid-19 pandemic accelerated the long-term shift towards responsible investing and this strong growth has brought greater demands for ESG data and transparency.
FE fundinfo’s 2021 ESG Market Review – UK Edition - pulls together our in-house expertise to provide a unique snapshot on how the UK funds industry is rising to the demands for higher ESG standards.
Our analysis shows how the average fund sector stacks up for its ESG, impact and controversy exposures, offering a valuable yardstick for individual funds to be compared against.
- UK equity funds achieved the highest average ESG scores, our data also showed they tended to be more exposed to morally controversial stocks than other sub-groupings.
- Only 98 (13%) of the 762 funds classed as ESG leaders had a zero weighting to stocks in morally controversial sectors.
- 97.7% of UK equity funds were classed as ‘ESG leaders’ under MSCI’s methodology. Less than 40% of global and regional funds were given this rating, and only 4% of emerging market portfolios.
- Around 60% of UK equity funds own businesses that derive at least 5% of revenues from alcohol, while more than half owned companies that make weapon-system components.