Mercatus webinar: Standardised data the ‘holy grail’ of ESG investing

More investors view ESG investing as important, but want standardised benchmarks to better understand how it is making a difference.

Fund managers need like-for-like information across sectors and geographies when judging the impact of environmental, social and governance investments, according to panelists at a sustainability webinar on 15 May.

Mercatus, an alternative asset and investment management platform, took a straw poll of the audience for the webinar. It found 87 percent of respondents were at least thinking about implementing ESG reporting into due diligence, if they had not done so already. “People are taking this more seriously,” said Rick Walters, head of infrastructure at GRESB, a real assets ESG benchmark, who spoke on the panel.

“Investors are eager for more focus and information on actual performance,” he said. “They’re wanting to see real performance measured within scoring analysis, rather than just transparency and disclosure.”

Tang Zongshong, who works in ESG and sustainability reporting at Partners Group, echoed that sentiment. He said Partners Group had taken little action in 2015 when it adopted a responsible investment policy.

“The action we did take when it came to ESG was more from a risk-mediation perspective rather than a value-creation perspective,” he said.

Now, with more data available, the firm has switched from “qualitative to quantitative” measurements, Zongshong explained.

What would help investors now, according to Chandra Eastwell, senior manager for ESG at Macquarie Infrastructure and Real Assets, would be a simplification of terms and definitions across sectors and geographies.

“If you’re going to use key performance indicators in a consistent and direct way, they need to be simplified,” she says.

Henry Morgan, a sustainable investment associate at Foresight Group and a webinar panelist, asked: “How do you track the financial benefits of something you instigated to prevent something from happening?”

“That’s the holy grail of responsible investing,” Eastwell responded.

Infrastructure Investor was a media partner for the Mercatus webinar.