Callan's 2024 ESG Survey Highlights Growth in ESG Adoption
Callan, a prominent institutional investment consulting firm, has disclosed remarkable insights from its 2024 ESG Survey, where 38% of respondents reported that they now incorporate environmental, social, and governance (ESG) factors into their investment decisions. This marks a slight increase from 35% in 2022, though it is a decrease from the survey's peak adoption rate of 49% in 2021.
Understanding the Significance of the Survey
This eleventh edition of the survey serves as an important tool to gauge the current landscape of ESG integration among institutional investors in the United States. Unlike prior years when the survey was conducted annually, Callan now rolls it out biannually, alternating with the upcoming Asset Manager ESG Study set for release in 2025.
Key Insights from the ESG Survey
Discussing the findings, Tom Shingler, the senior vice president and ESG practice leader at Callan, shared, "Since our initial survey in 2013, ESG adoption has significantly grown from just 22%. We continue to witness a segment of investors striving for deeper ESG integration on both the fund and implementation levels."
Here are some compelling outcomes from the survey:
- 38% of investors are now incorporating ESG factors—a 3% increase from 2022.
- Foundations emerged as the leading adopters of ESG, with 61% implementing these considerations in 2024.
- A striking 92% of respondents have included ESG language in their investment policy statements, indicating a strong trend toward integration.
- Organizational values were cited by 63% of participants as a key reason for incorporating ESG factors.
- The focus on diversity, equity, and inclusion within ESG strategies has surged to 32%, a significant increase from 11% in 2022.
- 67% always contemplate ESG factors during investment and manager selection processes.
- Lastly, 49% of those not incorporating ESG factors voiced their commitment to focusing solely on purely financial metrics in their investment evaluations.
Survey Methodology and Participation
Conducted in May and June 2024, this survey collected invaluable feedback from 90 distinct U.S. institutional investors, including public and corporate pension plans, defined contribution plans, endowments, and foundations. Participants varied in size from small plans to those managing over $20 billion in assets. It's important to note that changes in survey participants contribute to the variance in results.
Building a Future of Responsible Investing
As ESG considerations become increasingly prevalent, investors are motivated by a desire to align their portfolios with their organizational values. The trends illuminated in this year's survey are encouraging, suggesting that investors are recognizing the importance of responsible investing. Callan emphasizes continuing to view ESG factors through an investment lens, prioritizing objectives that align with clients' interests.
About Callan
Established in 1973, Callan is an employee-owned investment consulting firm dedicated to providing innovative and tailored investment solutions driven by proprietary research and comprehensive education. As a trusted advisor, Callan manages relationships with clients overseeing more than $3 trillion in assets, reinforcing its position among the largest independent investment consulting firms in the United States. With six offices nationwide, Callan continues to serve a diverse range of clients, including pension plans, endowments, foundations, and independent investment managers. Interested parties can learn more at callan.com.
Frequently Asked Questions
What is the primary finding of Callan's 2024 ESG Survey?
The primary finding indicates that 38% of respondents are now incorporating ESG factors into their investment decisions, a slight increase from 2022.
What percentage of foundations are integrating ESG factors?
In 2024, 61% of foundations reported incorporating ESG factors, representing the highest adoption rate among respondents.
How often does Callan conduct its ESG Survey?
The ESG Survey is conducted biannually, alternating with the Asset Manager ESG Study, which is scheduled for release in 2025.
What are common reasons for incorporating ESG factors?
63% of participants cited the alignment of portfolios with organizational values as their reason for integrating ESG factors into their practices.
How has the focus on diversity and inclusion changed?
The focus on diversity, equity, and inclusion as part of ESG has risen dramatically, with 32% of respondents incorporating these considerations, up from 11% two years prior.
