Investors who are planning to double their ESG investments over the next five years are being held back by the quality of sustainable data.

BlackRock surveyed investors with US$25 trillion of assets and said just over half (53%) of global respondents said they were concerned about “poor quality or availability of ESG data and analytics”.

This was cited as their biggest barrier to adopting sustainable investing, higher than any other barrier that was given.

However, Mark McCombe, chief client officer at BlackRock, said the ‘Global client sustainable investing survey’ showed a sustainable transition of investments is occurring “all around the world”, but there were regional differences.

In the Emea region, the top reason (51%) respondents provided for adopting sustainable strategies was because it is “the right thing to do,” while just 37% of respondents in the region said “mitigating investment risk” was a key consideration.

In the Americas, mitigating risk is the second highest driver of adoption (49%), followed by “better risk-adjusted performance” and “mandate from board or management” (both at 45%).

“For many European investors, they see the benefits of sustainability through the lens of societal impact. In the US, investors are more focused on risk management and investment performance,” McCombe said.

Other findings of the research were that climate-related risks were the top sustainability portfolio concern for 88% of respondents, and 20% said that the pandemic would actually accelerate their sustainable investing allocations.

A broad ESG integration into investments ranked as the highest approach, but approaches such as thematic and impact solutions were also favourites for investors in the Emea region, with 56% and 52% of respondents seeking these strategies, respectively.

A total of 425 investors in 27 countries, including corporate and public pension plans, were surveyed.

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