Future proofing: Why investing in ESG resource is vital for real asset investors

Demand for sustainable investing has boomed and asset managers have come under pressure to focus on ESG when buying stocks and bonds, but alternative or real asset investors have not been subjected to the same levels of scrutiny, however this is changing. A combination of strong performance, regulatory pressure and concerns about long-term issues such as climate change, have all been credited with driving investor interest. A poll by UK asset manager Aviva Investors of more than 1,000 pension and insurance investors last year found that eight in 10 believed the pursuit of ESG was not at the expense of financial returns.

Given buildings account for over 40% of global emissions according to the Environmental and Energy Study Institute, and a quarter of the carbon emitted in the UK comes from heating homes, there are huge opportunities to reduce global emissions in the built environment. The mitigation and adaptation of climate change both significantly hinge on real assets.

Beaumont Bailey surveyed 70 real asset investment firms to gauge how many had a dedicated ESG team, see the results of the survey below.

The Role of Leadership

Commitment to ESG Culture

Organisations who don’t address ESG in a meaningful way and deliver on key promises may suffer reputationally and lose the trust of key stakeholders. Clear and impactful communication from leadership on the day-to-day impact of ESG will help make it tangible and meaningful to all employees. This will help translate intentions into impact through embedding it in culture. Ensuring the right incentives are in place is key and increasingly we are seeing prominent global brands looking to align executive and wider employee pay with ESG performance criteria. Apple, Deutsche Bank, and Volkswagen are just some of the global multinationals who have introduced ESG in their bonus calculations in recent years. Given the changing nature of the workforce, future leaders will want to see a clearer correlation and alignment between purpose and reward evident in their roles.

Active Stewardship

It is vital that boards are held to account – analysed, challenged and influenced by key internal and external stakeholders to ensure they are fit for purpose and “ESG Literate”. Clear criteria will be key when analysing board composition and assessing new leadership hires to make sure the Board has sufficient experience to challenge assumptions and make sure the Board are equipped to deliver on complex and high-stake issues such as climate strategy. Research has found that a tech-savvy board outperforms their peers in ability to adopt technologies and culture. Cost of acquisition has increased but there is a clear cost benefit to hiring the best talent.

ESG Talent Trends

Market Activity

We have seen an uptick in ESG Leaders moving laterally to other firms within the sector. Senior talent with focus and experience in Sustainable Investments have been snapped up to help lead, grow and position their firms as ESG market leaders. We expect this trend to continue and gather momentum in 2023 as larger firms build out their platforms and teams. Mid-sized and smaller organisations will need to keep up and spinouts will take place.


The main obstacle for firms is a shortage of skilled talent. Staff retention is key to unlocking the opportunities associated with ESG. In many cases, we have seen firms look internally for talent, often moving top performers out of traditional investing into a leadership role within impact investing. Statista’s survey on Real Estate Investors showed that retention is the most important factor in talent attraction. In the short-term, it will continue being a tight market however in the long term the pool of ESG professionals and leaders will expand.


Firms with a well-resourced ESG team have positioned themselves well to capitalise and deploy capital at scale into sustainable investment opportunities. Data and a strong ESG visionary has led to improvements in offerings and services. Recent economic and social trends have led to higher levels of ESG integration among firms worldwide and higher prioritisation from investors to include ESG-focused firms in their portfolios.

Amanda Floyd is the Investment Practice lead at Beaumont Bailey. If you need support with your ESG resourcing strategy, get in touch with Amanda for a consultation here.