“Likewise, according to a 2016 study from Barclays, a divergence in priority appears between some asset managers and their clients regarding the relative importance of the three ESG components. Clients regard environmental factors as the most important, while governance is top of the list for bond managers.

Moreover, the same study showed that bonds with higher governance scores tended to have fewer downgrades and better outperformance, during the period from August 2009 until April 2016, than those with lower scores, validating the emphasis bond managers have historically placed upon effective governance.”

[COMMENTARY]I think it’s fair to say that most individual investors regard the ‘E’–environment — as the most important of ESG investing. However, among investment managers, the ‘G’ — governance — is the most important. And for good reason, since I’ve seen studies that demonstrate that the governance characteristics and activities of companies positively influence profits more than any other factor.
Deep Dive: Do not neglect the G in ESG, by Chris Bowie, Investment Week, UK.