As increasingly more asset managers incorporate environmental, social and governance (ESG) factors in their investment portfolios and branding, we have analysed how this key trend has affected managers' advertising and to which extent investors engage with ESG messaging.
During the first half of 2020 asset managers have targeted institutional, intermediary and end investors across Europe with their ESG advertising campaigns, data by Fundamental Media found.
ESG investing has significantly gained momentum over the past decade across the globe, but in Europe in particular. Recent research by Fundamental Media, carried out among institutional investors in five key European institutional markets, found that around 80% of institutional investors said they believe ESG investing will increase over the next 12 months. This was the highest percentage recorded among all the investment strategies that the research participants were asked about.
Furthermore, a manager's ESG approach is in the top five of most important selection criteria when institutional investors are picking the winning manager from their short list, alongside factors such as performance and investment process.
When it comes to topics that investor audiences engage with the most, ESG was the second most engaging during both Q1 and Q2. Fundamental Media analysed thousands of social media posts by asset managers during the first two quarters of 2020. While interest in certain topics waned or increased as the Covid-19 crisis developed, engagement with ESG-related topics remained high. This indicates a structural interest in the topic by investors, regardless of market volatility or uncertainties such as the pandemic.
So amidst this high level of interest in responsible investing, how have asset managers been promoting their ESG offerings?
Using data from Fundamental Monitor, our proprietary tool monitoring the advertising behaviour of asset managers globally, we looked at managers' ESG-related campaigns in Europe during the first half of 2020.
Overall we can conclude that managers have massively allocated resources to ESG messaging. Also in this respect we can clearly state that ESG advertising is on its way up as managers are incorporating their ESG messaging in their brand messaging, producing a significant amount of ESG insights and have integrated ESG factors in an increasing proportion of their assets. On top of that, they are being vocal about it.
Taking a closer look we see that the top ten spenders account for the majority of the impressions among investors. UBS Asset Management has achieved the highest level of ad impressions, followed by Invesco, Amundi Asset Management, Robeco and BNP Paribas AM.
Overall, the country that was targeted the most with ESG messages from the top ten managers is the UK. Six out of the top ten campaigns were targeting the UK, while a large number of countries were targeted by four out of ten fund managers. These markets are Italy, France, the Netherlands and Spain. Germany, Sweden and Switzerland have been targeted the least with ESG messages during the first half of 2020.
When it comes to the investor audiences targeted, eight out of ten fund managers targeted end investors during this period, followed by six targeting wholesale investors and four targeting institutional investors.
The table above shows that the majority of ESG campaigns were running cross border, although UBS, BNP Paribas, Schroders and iShares have been focusing their advertising on a single country.
When looking at the focus of asset managers' advertising, we see a distinct shift from Q1 to Q2 of this year. While in the first three months of 2020 most ESG campaigns focused on fund promotion followed by sharing insights and then brand building, this drastically changed in the second quarter. In line with what we have seen in our social media research, investors started looking for ways to understand the impact of Covid-19 on the investment market and their portfolios, as the virus continued to spread further. It is therefore no surprise that most campaigns launched in Q2 focused on sharing insights followed by brand building. While fund promotion had made up over 50% of ESG campaigns in Q1, it made up less than 10% of campaigns in the following quarter. This tells us that asset managers have been quite agile in adapting their messaging. While managers have pivoted their messaging during the Covid crisis, investors kept a great interest in ESG. And we expect this trend to last.