Investment Outlook 2022

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Paul LaCoursiere, Global Head of ESG Investments, explores four themes for 2022 that he considers pivotal to the direction of travel for environmental, social and governance (ESG) investing.

KEY TAKEAWAYS

  • ESG investing continues to gather momentum and we are hugely supportive. We believe open and meaningful debate on the opportunities and the limitations is key to realising potential.
  • Challenges for the financial industry and investors include relying on corporate governance and capital markets to enforce intended change – key questions remain on how boardrooms strike the right balance.
  • For investors to identify and invest in products that align with their values and objectives, we believe that global coordination of regulation and product labelling is a critical next step.

ESG investing is evolving at an unprecedented pace and we see no reason to expect this to slow in the year ahead.

The direction of travel in terms of investor demand (Figure 1) is clear, in our view. As an asset manager committed to ESG, we welcome this building momentum.  But we also believe there are meaningful obstacles to our industry achieving the outcomes that many hope ESG considerations and capital markets will deliver. International policy, regional considerations and investor preferences will all shape how ESG considerations, and our industry, develop.