MSCI Investment Insights 2021 Global institutional investor survey

Many institutional investors are facing their greatest challenges for many years. They are transforming their investment processes at high speed to reflect today’s imperatives, such as environmental, social and governance (ESG) investing, innovative technology, ever-shifting regulations and demands for greater transparency. Yet they must do this in a complex and unstable financial environment. I compare this challenge to changing the sails and masts of a ship as it is battered by a storm. For this report, we surveyed 200 asset owners (pension funds, insurers, sovereign wealth funds and endowments/foundations) owning assets of around $18 trillion. Reading it, I was struck by how the pandemic has further accelerated the shift to ESG. Asked for the top 3 trends that will affect their organization over the next three to five years, 62% cited either climate change or the increasing complexity of ESG measurement — far ahead of other themes such as market volatility and regulation. But it is not the only transformation. A new wave of data technologies is bringing very significant changes to investment processes. These technologies open the door to new ways of understanding markets and increasing efficiency.