ESG Ratings and Engagement: Complementary Practices

Case Studies on ESG Scoring, Integration, and Engagement

ESG scoring is a complex process, and each company that provides ESG scores has its own distinct processes. FTSE Russell is one such company, and in their paper below, they explain their unique way of ESG ratings generation.  

Meanwhile, Baillie Gifford explores the discrepancies between ESG ratings providers. These discrepancies make the application of ESG index-based strategies ever more difficult, and highlight the crucial need for engagement in order to generate better long-term outcomes. Federated Hermes picks up on the engagement aspect, peering into the fashion industry's take-make-dispose model and making the case for adopting more circular approaches.

The Rise of ESG (Baillie Gifford, 2021)

The focus of this Baillie Gifford paper is engagement. An index-based (or ratings-based) approach to ESG has several shortcomings, including the divergence of ESG ratings. The authors describe an approach that leans on fundamental ESG analysis, yet relies heavily on active engagement as a way of generating positive long-term outcomes.

Your Five-Minute Primer on Sustainable Investing (Intech, 2021)

For compliance reasons, this paper is only accessible in certain geographies

Intech's eBook on sustainable investing provides a quick overview of ESG criteria, some of the key concepts within ESG analysis, and methods of ESG integration.

Impact Investing: Why it matters now more than ever (T. Rowe Price, 2021)

For compliance reasons, this paper is only accessible in certain geographies

The events of 2020 have refocused investors' attention on a number of different issues related to environmental and social sustainability. In this article, T. Rowe Price provides an overview of the UN's Sustainable Development Goals and the concept of impact investing.

Sovereign Fixed Income: An update on our ESG scores (Franklin Templeton, 2021)

For compliance reasons, this paper is only accessible in the EMEA region

Franklin Templeton provides actual ESG scores in this biannual update to their ESG sovereign debt model. This edition also contains case studies on five countries and insight into potential applications of these scores within portfolio management processes.

Climate Risk and the Transition to a Low-Carbon Economy (BlackRock, 2021)

For compliance reasons, this paper is only accessible in certain geographies

Corporate governance is a critical component of tackling climate risk at the organisational level. In this paper, BlackRock lays out their expectations of corporate boards when addressing climate-related issues.

Facial Recognition & Human Rights (Candriam, 2021)

For compliance reasons, this paper is only accessible in certain geographies

What risks are inherent within facial recognition technology? How can we ensure that this technology is used responsibly? Candriam's unique, 36-page study looks at this issue through a number of different lenses.

Webinar: Climate and Sustainability Portfolio Analysis (BlackRock, 2021)

For compliance reasons, this paper is only accessible in the United Kingdom

In this webinar, BlackRock describes some of the difficulties faced by asset allocators when performing portfolio analytics, such as the measurement of climate risk attributes at the portfolio level. They also suggest potential solutions for multi-asset portfolio managers to consider.

Transport Technologies For a Sustainable Future (Janus Henderson, 2021)

For compliance reasons, this paper is only accessible in certain geographies

New technologies are paving the way for a more sustainable future for the transport industry. In this article, Janus Henderson portfolio managers highlight some of these solutions.

A Cautionary 'Green' Tale (LGIM, 2021)

For compliance reasons, this paper is NOT accessible in the United States and Canada

This LGIM article discusses the issuance of green bonds, the green premium that they occasionally command, and ways to analyse this type of debt.

ESG Scores Part 2: Contribution of themes to ESG ratings (FTSE Russell, 2021)

What characteristics, or themes, provide the greatest contribution to an overall ESG rating? FTSE Russell explains the themes that matter most within their own rating methodology.

Temperature Scores: An innovative tool for ESG investors (Amundi, 2021)

For compliance reasons, this paper is NOT accessible in the United States

Amundi Asset Management suggests a unique model of temperature scores for both corporate and credit analysis. These scores effectively normalise the projected carbon emissions of companies in order to see how they measure up to a net zero global emissions target, and a future global temperature increase of 1.5°C or less.

Environmental Impact: Fixing fast fashion (Federated Hermes, 2021)

Fast fashion needs to become a more circular industry. Federated Hermes describes the detrimental aspects of the current take-make-dispose model. The paper explores some of the steps the industry needs to undertake to amend this ultimately unsustainable model and to adopt more circular approaches.