SFA Publishes Results of 2022 ESG Market Sentiment Survey: Securitization Issuer and Investor Perspective

SFA has published the results of its 2^nd Biennial ESG Market Sentiment Survey:  Securitization Issuer and Investor Perspective. In 2022, SFA surveyed structured finance market participants on the use of environmental, social and governance (ESG) disclosure metrics in investor reporting, due diligence, and client investment alternatives. Comparing data from our latest survey to 2020, our results provide insight into how ESG disclosure and investment strategy alternatives have evolved over the last two years. Additionally, the survey reflects issuer and investor perspective on ESG disclosure practices including the SEC’s proposed rule on mandated climate-related disclosure.

Key Takeaways of Survey Respondents:

• ESG disclosure and investing within structured finance grew 15% in the last 2 years
• “Client Demand” and “Alignment with Firm Values” continue to be the top ESG motivators for investors
• Issuer disclosure is growing thoughtfully with 40% of the respondents reporting that they provide some ESG disclosure and another 40% seriously considering it
• The top ESG integration motivator for issuers continues to be ongoing demand from investors
• ESG disclosure in the structured finance market has begun to incorporate a broader range of asset classes including RMBS, CMBS, Auto, Personal Loans, Data Center, PACE, Rail
• ESG investment strategies are shifting to meet changes in underlying client demand
• Disclosure is a fundamental imperative – with collateral-level information being most important for securitization investors

 About SFA’s ESG Disclosure Initiative

SFA’s ESG Disclosure Initiative aims to develop an industry-consensus best practices for ESG disclosure to promote investor transparency that the industry can adopt globally. This specifically includes collaborating to create ESG disclosure framework specific to the structured finance market along with underlying reporting standards for each asset class. To achieve this, SFA has established asset class working groups starting with the largest sectors: Auto ABS, RMBS, CMBS, CLO, and Unsecured Consumer ABS. Participants represent every facet of the market — including issuers, investors, rating agencies, data analytic firms, and law firms.

SFA members can join SFA’s ESG Initiative and participate in the market collaboration to develop a consensus-built disclosure framework for the securitization industry by registering here.