Demographic shifts have prompted a dramatic surge in the number of institutional investors directing their funds towards responsible investments around the world.
That is according to new research by Aon, which finds that regulatory changes and access to quality to data have also contributed to the shift in attitudes among investors.
It was found that more than two-thirds now consider responsible investment (RI) important to their organisation, with two-fifths already developing RI policies to help guide decision-making.
A quarter of those said they had a desire to impact global issues like climate change, while almost two-fifths said environmental, social and governance (ESG) considerations led to better investments.
"While responsible investing is still relatively nascent in many organisations, interest in these initiatives has skyrocketed over the past few years," Aon partner, Meredith Jones, said.
"We've gone from clients asking sporadically about responsible investing, to full-scale development of policies and implementation of responsible investing initiatives."
The research involved a global survey of 223 institutional investors, with around half saying better data, compelling research on returns and agreements on definitions would boost RI.
It was also found that there is a geographical split in attitudes, with investors in the UK and continental Europe taking RI more seriously than their US counterparts.
Approximately 47% of European investors have an RI policy, compared to just 30% in the US, with British investors most likely to withdraw from managers without a policy in place.
The findings also show that more than a third of investors in Europe are active owners of shareholder engagement, compared with only 15% in the US.
Integrating ESG considerations into investment strategies was found to be the most common RI action globally, followed by 'negative screening', which involves investors avoiding irresponsible firms.
Aon expects RI to grow, but added: "More will need to be done before widespread global adoption. This includes clarity about definitions, access accurate data and measurement, concerns about performance, and regulatory pressure."
