Data snapshot: ESG a priority for foundations and endowments

Nearly one-third are unlikely to allocate capital to a manager that does not have a net-zero commitment, according to research from Bfinance.

Despite the backlash against ESG in the US, most foundations and endowments regard ESG as a very important consideration in their investment strategy. That is according to a report recently released by consultant Bfinance.

To compile the report, the firm gathered information from 61 respondents from endowments, public and private foundations and charities/non-profits on a range of topics, including ESG and impact. Significantly, respondents were predominantly European (55 percent), with 29 percent from America.

Four-fifths (80 percent) of respondents said ESG considerations were very or moderately important to their investment strategy. The survey also found that nearly one-third (29 percent) of private markets investors would be unlikely to allocate capital to a manager that did not have a net-zero commitment. The same percentage said they would be unlikely to allocate capital to a GP that could not demonstrate specific examples of divestment based on ESG assessments.

The report also found that 73 percent of foundations and endowments that invest in private equity, venture capital and private debt make impact investments as part of that allocation. The same was not true of real estate investors – just 18 percent are making impact investments through their real estate allocation.