Wednesday 8 September 2021 3:04 pm

Exclusive: City investors increasingly pay attention to ESG reporting and transparency

Professional investors in the City and across the UK are expecting a greater focus on Environmental, Social and Governance issues in small and micro-cap companies, according to new data that was shared exclusively with City A.M. today.

Just over 87 per cent of all investment managers MBH Corporation spoke to said they believe the focus on ESG issues will increase over the next 12 months with 31 per cent of investment managers expecting a dramatic increase in the next year.

Increased focus and investment on ESG will be accompanied by enhanced reporting and transparency from companies on their ESG policies and strategies with 92 per cent of investors expecting the level to increase, the MBH team found.

The numbers expecting a dramatic increase over the next five years increased to 46 per cent, with none of the investors interviewed believing the focus on ESG will decrease in the next 12 months or the next five years.

Small and micro-cap investments

The MBH study, among UK based professional investors managing a collective £83.2bn who specialise in small and micro-cap investments, found that 82 per cent of investors believe the focus and investment by small and micro caps in ESG will increase over the next three years with 37 per cent saying it will increase dramatically.

“ESG issues sit right at the heart of the corporate and investor agenda and our study demonstrates they will only grow in importance for investors and small and micro-cap companies,” Vikki Sylvester, CEO Acacia Training and Executive Director of MBH, told City A.M. this afternoon.

“ESG is not just something for major companies and our commitment to ESG is integral to our business as we continually look to find new ways to make sure we continue to have a positive impact on our people and the planet,” she added.

Her boss, CEO Callum Laing, stressed that ESG might be “flavour of the day for investors right now, but whether it is called ESG, CSR, or Social Entrepreneurship, most small businesses – certainly the ones we work with – have been doing this in one form or another for decades.”