A recent study conducted by InvestmentNews Research and sponsored by Calvert Research and Management measured financial advisers' perceptions of environmental, social and corporate governance investing. Among other trends, the study, "From Upstream to Mainstream: ESG at a Tipping Point," showed notable differences in male and female advisers' perceptions of ESG.
Overall, usage of ESG investing strategies is up 25% (from 35% to 46%) year over year.
While nearly one in two advisers are now constructing portfolios taking ESG factors into account, the trend is much more pronounced among women, the majority of whom (53%) are doing so.
Of those female advisers who aren't currently doing so, nearly all would at least consider ESG. Male advisers, on the other hand, are nearly three times as likely as females to be gung ho against ESG — 26% of them say they are not using and will not consider taking ESG into account when constructing client portfolios.
The reasons for utilizing ESG investments also differ significantly by gender. For females, the social benefit (55%) and mission/values (52%) are the clear top two reasons for doing so.
Social benefit is a top reason for males as well, but the decision to invest in ESG is much more a result of client demand (61%), which male advisers' cited as their No. 1 reason.
Interestingly, women are more likely to recognize the more tangible benefits of ESG investments, such as portfolio performance (38%) and risk reduction and management (38%).
The list of reasons for not utilizing ESG is more fragmented, but also shows interesting variations when cut by gender. Client interest (or lack thereof) is again the critical factor in the investment decision, but a set of secondary reasons clearly plays an influential role.
Male advisers tend to note more of these secondary reasons in total, including poor or limited returns (31%), limited investment opportunities (31%) and being "too niche for my business" (28%). Compared to men, women are much less likely to note poor or limited returns (4%) as a reason for not investing, which suggests that they understand that they do not need to sacrifice performance to invest sustainable investments.
When asked, female advisers are 47% more likely than male advisers to believe there is a positive association between ESG factors and corporate financial performance. Nearly half (49%) of them agree with this statement compared to 30% among their male counterparts. Even more, zero female advisers strongly disagree with this statement which speaks to their confidence in ESG adding financial value as well as moral value to a portfolio.