And even more survey data on the growing importance of Environmental, Social and Governance (ESG) factors for investment decisions: SustainAbility, a consultancy, surveyed more than 1,000 investment professionals in September 2012 and published the data in their series Rate the Raters. In this installment of the series, SustainAbility set out to better understand the perspectives of mainstream analysts and portfolio managers on ESG issues and ratings. The survey’s motivation was that the vast majority of investors states that ESG issues are important. However, according to data by US SIF, 89 percent of U.S. investors are making decisions based mainly on traditional, more narrow considerations.

So how do ESG issues factor into the decisions of the mainstream investor, if at all? The SustAinability survey sheds some light on this question:

• Among the ESG factors, governance gets most consideration. 59 percent of respondents often or always consider governance issues in their investment decision, followed by social issues (40 percent) and the environment (34 percent).
• Within social issues, customer relationship management (74 percent) and employee training and development (68 percent) outweigh other issues such as diversity (49 percent).
• Over 60 percent of respondents say they are using ESG data and information more today than they were three years ago, while 63 percent say they will use such data and information more three years from today.

The survey concludes that the biggest challenge to make sustainable investing more widespread is to change the time horizon of investment managers, from rewarding short-term performance to a time horizon where the risk and opportunities stemming from ESG issues play out.