Just 17% of European asset owners targeting biodiversity-themed strategies when investing sustainably

Written by Adam Cadle

18/01/2023

Just 17% of European asset owners currently target biodiversity-themed strategies when investing sustainably, but 57% plan to invest in broad thematic ESG strategies with a biodiversity focus in the next 12 to 24 months, new research by Cerulli has shown.

Two-thirds of institutional investors and more than half (55%) of asset managers are addressing biodiversity risk through the exclusion of companies in biodiversity-sensitive sectors.

COP27 highlighted that without protecting and restoring nature, there is no feasible path to limiting global warming.

On the issue of greenwashing, 85% of institutional investors said they were in favour of fining managers that engage in greenwashing practices.

“Despite the prevalence of greenwashing allegations in the asset management industry, few managers have been fined,” Cerulli director Justine Deveikyte said.

“However, this may change as the regulation around sustainability claims becomes clearer.”

In total, 49 asset managers completed Cerulli's ESG survey. Of those respondents, 41% were managers with AuM between €1bn (US$1bn) and €50bn, 24% were managers with AuM between €51bn and €100bn, and the remaining 45% were large managers with AuM of €101bn and more.

A total of 210 institutional investors evenly split across the UK, France, the Nordics, the Netherlands, Germany, Italy, and Switzerland completed the firm's ESG asset owner survey. Of those respondents, 57% were pension funds, 31% were insurers, and 12% were endowments and foundations. Our survey included a mix of smaller and larger asset owners: 4% of respondents were investors with AuM between €500m and €1bn, 57% were investors with AuM between €1bn and €5bn, and the remaining 39% were large investors with AuM of €6bn or more.

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