Research Reveals Desire to Make a Positive Impact tops List of ESG Priorities for Institutional Investors and Wealth Managers


New research(1) from fixed income ETF provider Tabula Investment Management Limited (“Tabula”) reveals that a desire to make a positive impact (or reduce a negative one) is the key reason for selecting ESG investments.

When asked to pick the reasons for selecting ESG investments, 70% of European institutional investors and wealth managers cited a desire to make a positive impact. This was followed by the need to comply with investment policies or guidelines, which was cited by 67% of survey respondents.

100 professional investors across the UK, Sweden, Switzerland, Denmark, Norway, Italy, Germany and France were interviewed in February 2021.

Interestingly, the survey identified a growing desire for funds to have an ESG rating from an independent rating agency. 77% of survey recipients interviewed identified an ESG rating as fundamental in their investment decision making, compared to just 10% of survey participants(2) nine months prior. Meanwhile, just 24% of investors were concerned about a fund manager’s stewardship record when selecting investment funds.

When asked which ESG themes are most important in investment selection, survey participants showed a clear preference for ESG themes that have impact, such as climate change (41% of respondents), over “DNSH” investments which “do no significant harm” (11% of respondents).       

Earlier this year, Tabula launched the world’s first fixed income ETF which tracks a Paris-Aligned benchmark. The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF (the “ETF”) is currently the only EUR core IG ETF that meets the Sustainable Finance Disclosure Regulation (SFDR) Article 9 requirements. The fund delivers exposure to Euro investment grade bonds and provides 50% lower greenhouse gas emissions when compared to the broad market, and an annual decarbonisation of at least 7%. It undertakes robust ESG screening, with bonds excluded from companies that have violated ‘social norms’ (on human rights and labour, for example), to those selling controversial weapons and tobacco, and from companies that cause significant environmental harm. 

“This year, ESG criteria in funds will shift from being one of the many factors to consider to being a key theme in all investments, and the recent introduction of the SFDR will help accelerate this”, says Tabula CEO, Michael John Lytle.

“We expect funds with specific ESG outcomes to take over the ESG thematic, and Paris climate benchmarks will increasingly become a core allocation for investors with climate concerns. To date, there have not been any passive fixed income funds or ETFs offering this exposure – we are the first ETF provider to deliver this opportunity and the only EUR core IG ETF with an SFDR Article 9 categorisation.”

The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF is suitable for core allocations as it applies a strict liquidity filter and sector constraints, while historical back-testing calculates that it would have delivered strong historical correlation with traditional broad Euro investment grade benchmarks. Tabula worked with Solactive and ISS ESG to develop the ETF’s benchmark, the Solactive ISS Paris Aligned Select Euro Corporate IG Index, a liquidity-focused Paris Aligned benchmark for Euro IG bonds.

The data used for filtering the bonds is supplied by ISS ESG, part of the Institutional Shareholder Services group of companies (ISS). ISS has existed for almost 30 years and has had a climate practice for over 10 years. Its data is some of the highest quality available in the market.

Tabula is firmly committed to supporting ESG investing. It is a signatory to the UN-supported Principles for Responsible Investing and also to the Climate Action 100+. In addition, Tabula is a member of the Institutional Investors Group on Climate Change (IIGCC) and it aims to actively engage with index providers to improve ESG standards across new and existing fixed income indices.

The Tabula EUR IG Bond Paris-aligned Climate UCITS ETF (EUR) – Acc. is listed on Xetra with ticker TABC. The ETF has an ongoing charge figure (OCF) of 25bps. An SEK-Hedged Accumulating share class is also listed on Cboe with ticker COOLx and an OCF of 30bps.

  1. Tabula Investment Management commissioned the market research company PureProfile to survey 50 wealth managers and 50 institutional investors in February 2021.  Professional investors were based in UK, Sweden, Switzerland, Denmark, Norway, Italy, Germany and France.
  2. Tabula Investment Management commissioned the market research company PureProfile to survey 100 wealth managers and institutional investors in May/June 2020.

Most recent episodes

Achieving Treasury Centralisation with In-House Banking as a Service

Catherine Hill (Salesforce), Christof Hofmann and Dirk Kronshage (Deutsche Bank) join TMI's Eleanor Hill to consider how treasury centralisation can be successfully achieved...


Exploring ESG Investing

Security, liquidity and yield have traditionally been the treasurer’s top investment considerations. But with the call for greater corporate social responsibility – and the solid performance of sustainable investments – ESG is now becoming a fourth...


Crypto Assets: The Questions Every Treasurer Should Be Asking

Are crypto assets really a viable treasury investment? If so, how can you enter – and exit – the market with the least possible risk? How does the custody of crypto assets work? What are the accounting and tax...


Building a Digital Treasury: Resilience Meets Agility

Karen Gilhooly and Brian McKenney (HSBC) talk to TMI’s Editor, Eleanor Hill, about the imperative need for treasurers to invest in technology if they wish to enhance the strategic value that they bring to the...


EACT 2021 Survey: Top Trends Revealed

Jan Dirk van Beusekom, BNP Paribas, and François Masquelier, EACT, discuss the findings from the 2021 EACT Survey, which garnered responses from over 340 corporate companies. Hear a detailed overview of the key trends that have captured the attention of European...


Taking Care of Cash: Cigna Treasury’s Digital Transformation

Cigna, a global health services provider, encountered a multitude of challenges when its 70,000 employees were plunged into a remote working environment. Payments concerns, bold digital aspirations and the requirement...


Treasury on Demand: Are you Ready?

A need to react quickly to new business requirements is driving a new age in treasury, characterised by on-demand concepts. In our latest podcast covering the Journeys to Treasury report, Steven Lenaerts, BNP Paribas, and Christian Mnich, SAP, explore the drivers...


Smart Treasury: The Future is Now

In this TreasuryCast episode, our guests from Standard Chartered, Sunday Domingo and Byron Gardiner, discuss best practice approaches in a data-driven treasury environment. The experts also consider how treasury responsibilities such as working capital and...


Co-Creation in Action: Treasury Evolution

Think co-creation is just a buzzword? Then it’s time to think again. As Pierre Fersztand, Global Head of Cash Management, Trade & Payments, BNP Paribas, explains, value-adding solutions are being implemented as a...


Leading Edge Supply Chain Finance: Smart and Sustainable

TMI’s Eleanor Hill is joined in the virtual TreasuryCast studio by Gwynne Master, Managing Director and Global Head of Trade, Lloyds Bank, to discuss all things supply chain finance, an area that has faced...