UK equity funds are outperforming their peers and industry rivals when it comes to their overall ESG scores, research has revealed.
Published today, the 2021 FE fundinfo ESG Market Review, which aims to provide investors with a snapshot of how the UK funds industry stacks up in terms of ESG, ethical and impact factors, finds the average UK equity strategy had a score of 8.60 based on MSCI’s ratings process. This is around two points higher than those with a global (6.88) or regional focus (6.46). For emerging market equities, the average fund had an ESG score of just 5.55. Scoring is recorded on a 0-10 scale.
The overwhelming majority of UK equity funds meanwhile – 97.7% of those assessed in the report – were also classed as ‘ESG leaders’ under MSCI’s methodology. Less than 40% of global and regional funds were given this rating, and only 4% of emerging market portfolios.