ESG Update: Mar 2022

Top ESG Investment Content

Thought leadership in ESG, and the associated investment implications, continues to evolve and develop. Whether you favour equity, fixed income, or perhaps an ESG themed strategy, it pays to be armed with the latest thinking when making allocation decisions or evaluating your investments from an ESG standpoint.

This update begins with a paper from Man Group on whether you can consider your portfolio to be in line with the Paris Accord’s targets. Robeco looks at the asset management industry as a whole, in relation to the continuing biodiversity crisis. For a more general update consider SimCorp’s paper on the end-to-end approach of ESG investing, or Baillie Gifford’s podcast on the pitfalls of using ESG metrics to assess investments.

Is Your Portfolio’s Carbon Constraint Paris-Aligned? (Man Group, Feb 2022)

Many investors apply a carbon budget to their portfolios of 30-50% below benchmark, but is that sufficient for alignment with net zero and the Paris Accord’s 1.5-degree target? Man Group discusses the practicalities of portfolio construction in a greening world.

Unlocking Impact Outside of ESG-Labelled Debt (T. Rowe Price, Feb 2022)

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

Market participants are increasingly wary of the ‘greenium’ that can be associated with ESG-labelled bonds. T. Rowe Price advances that investors could look to broaden their opportunity and consider non-labelled debt, without diminishing investment impact.

Low Vol Investing on a Low Carb(on) Diet (Intech, Mar 2022)

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

Low volatility investing is an increasingly popular strategy in the equity space given pervasive market uncertainty. For investors wanting to pursue this approach whilst still reducing carbon exposure, this eBook from Intech is useful reading.

ESG Investing: Why the end-to-end approach is gaining ground (SimCorp, Feb 2022)

This paper starts out by explaining why the incorporation of ESG into the investment process has been transformative. The authors also discuss what end-investors are looking for, the issues with ESG data sourcing and management, and ESG reporting.

Asset Management’s Responsibility in Preventing Biodiversity Loss (Robeco, 2022)

Robeco takes a deep dive on biodiversity through the lens of the asset management industry. They review why biodiversity loss has become an urgent issue to address and offer insight on how investors can play their part in confronting the concern.

Podcast: Exploring sustainable growth – A new approach to ESG (Baillie Gifford)

Assessing ESG investing impact remains difficult due to an inevitable lack of standardisation in ESG metrics. This Baillie Gifford podcast asks whether investors may be over-estimating the positive impact of their investments as a result.

ESG Survey: Investors’ global focus on carbon will change the game (SSGA | SPDR)

For compliance reasons, this paper is only accessible in the United States and Canada

This study is built on a wide-ranging survey of senior executives with asset management responsibilities at more than 300 institutions. The results consider decarbonisation targets, data and performance concerns, and asset suitability amongst many other topics.

Global ESG Insights: Key trends (Fisher Investments)

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

This comprehensive ESG Insights paper covers global ESG trends including demand, integration, and fund flows. Fisher Investments also looks at growth and profitability in electric vehicles, and ESG performance including the drawbacks of using ESG scores.

Water Report: Rising risks in South Asia (Allspring Global Investments)

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

Allspring Global Investments considers the potential effects of water crises on south Asian economies. They conclude that if there is no change in approach, devastating effects on human life, productivity, and economic growth are inevitable.

Disruptive Innovations for Net Zero (Credit Suisse Research Institute, 2022)

Renewable energies have benefitted from technological enhancements in recent years, a trend which is likely to continue. This paper considers the latest need-to-knows in solar and wind, and what innovations will mean for the industry’s current leading lights.