Sustainable finance is a growing market, not least the integration of environmental, social, and governance (ESG) factors into the investment process. ESG has gained ground in recent years primarily implemented by asset managers and asset owners. But what about hedge funds and their approach to ESG?
The hedge fund industry is known for its ability to adapt to new opportunities and create market liquidity. With its unique characteristics and diversity of trading strategies, hedge funds are capable of blazing their own path to ESG integration. Some choose not to. Some are way ahead of the game. They are all somewhere on the ‘ESG Spectrum’.
In this in-depth report, we explore the current level of ESG integration among a global group of hedge funds representing over half a trillion US dollars in assets.
We explore the main drivers and methods of integration, the key barriers, the trading strategies to hand, and the forces that will create the tipping point to adoption in the near term.