Institutional asset owners turn to third parties for ESG support, research shows

Written by Adam Cadle

10/03/2022

A lack of in-house ESG expertise is prompting institutional asset owners to seek support from investment consultants and outsourced chief investment officers (OCIO), latest research published by Cerulli has revealed.

Cerulli said it expects to see the demand for investment consultant and OCIO support for ESG to continue to grow.

“Given their strong, deep bench of investment professionals that specialise in ESG investing, OCIOs can offer highly customised services to their clients and may even support aspects of an asset owner’s ESG strategy, including shareholder advocacy and voting proxies in line with their client’s ESG goals, Cerulli associate director Laura Levesque stated.

“The broad nature of what ESG encompasses, multiple approaches to ESG integration, and the lack of an industry reporting standard makes the expertise of these third parties far more valuable than they may be for more traditional investment consulting services or outsourcing portfolio management. Clients that would not have considered using these services for other aspects of portfolio management are more likely to do so because of the intricate nature of ESG and the relatively low expertise of experienced portfolio managers in the topic.”

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