Ninety One: Fund managers 'overly' reliant on ESG scores

88% use third-party ratings

Findings from Ninety One have shown the mass majority of European fund managers (88%) are using third-party ESG ratings to support investment decisions as part of their investment process, while 92% said they expect to increase their use of ESG ratings in the future.

According to Ninety One, these findings reinforce the firm's belief that the investment industry relies too heavily on ESG ratings. Ninety One went on to claim that ratings cannot provide a full view into how a company manages its externalities both positive and negative, and that externalities such as a company's impact on the environment (natural capital), interaction with the societies it operates in (social capital) and the potential of employees (human capital) will increasingly influence valuations. Deirdre Cooper, co-head of thematic equities and co portfolio manager for global en...