While treasurers have repeatedly shown interest in using ESG-related short-term investment instruments, actual investment levels have yet to match these aspirations. Recent research from ICD explores the gap between intention and execution in treasury investments.
Environmental, social, and governance (ESG) has risen up the treasury and finance agenda in recent years, with banks and financial service providers expanding the number of ESG-related products made available to corporate treasurers.
The short-term investment space is an area where many will have seen an increasing number of funds marketed as ‘ESG’. For example, out of all of the investment products available on independent portal provider ICD, almost half (49%) are tagged to either ESG products or diversity and inclusion (D&I) products, with this representing around 30% of total assets.
However, in ICD’s 2021 ESG Survey, published in July this year, an interesting wrinkle in the approach of treasurers to ESG investments emerged. While treasurers overwhelmingly stated their intention to invest in ESG short-term funds – with 46% of treasurers currently invested in such funds, and another 44% planning to invest in the next 12 months – ICD’s platform told a different story.