ESG INSIGHTS Q4 2018

 

Embedding environmental scenario analysis into routine financial decision making in South Africa

 Although South Africa is commended for being a global leader in the introduction of sustainability into the financial system, the country still remains one of the world’s most energy and carbon-intensive economies. This article aims to empower financial institutions across the banking, insurance and asset management sectors by promoting the use of environmental scenario analysis within financial decision making.

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Embedding Analysis Resized

Aim higher: Helping investors move from ambition to action with ESG investment approaches

 Over the years, the value of assets under management that are invested according to ESG strategies has increased. This article gives clarity on ESG and related terminology as well as an overview of the need for traditional metrics such as sales growth, market share and valuation to be viewed alongside sustainable factors in conventional security analysis. A list of challenges that often impede ESG adoption in the financial advisor community is also discussed.

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Aim Higher Resized

Going mainstream – the future of ESG investing

 The signing of the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement in 2015 are two landmark accords seen as the premise for the momentum gained in the RI space that allows ESG to begin making its mark in mainstream investment decision making. Read the views of 281 asset owners’ and managers’ on how ESG has altered the thinking and action around how managers should be executing their fiduciary duty.

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Going Mainstream Resized

How markets price ESG: Have changes in ESG scores affected stock prices?

 The question around the financial benefit of ESG investing has been a long-standing one hedged by a wave of uncertainty. With the assumption that there is a relationship between the ESG profile score and valuation of companies, this article assesses whether a change in the ESG profile score has an effect on the overall stock price of companies. Results reveal that the market has priced ESG characteristics into valuations on an ongoing basis and that the signal becomes less effective beyond a one-year horizon.

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Markets ESG Resized

The future of sustainable investing in Europe and beyond

 Europe continues to be a world-leader in sustainable investing opportunities, and as such – this article provides a collation of responses from an industry dialogue among top ESG leaders. Panellists have shared their views on investor demand for ESG investments, sustainability integration across organisations and the progress and predicted impact of the European Commission legislative package on sustainable finance introduced in 2018.

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Sustainable Europe Resized

Performing for the future: ESG’s place in investment portfolios - today and tomorrow

 This article is a compilation of institutional investor responses on how they implement ESG and the challenges they face that often inhibit investor capacity to embrace ESG investing more fully. Findings reveal that there still remains varying convictions around ESG performance by institutional investors along the ESG adoption continuum.

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Future Performing Resized

World Energy Investment 2018: Executive summary

 The transition towards a low-carbon economy requires an understanding of the global investment energy trends. The International Energy Agency therefore provides annual publications highlighting the ways in which investment decisions in the energy sector roll out yearly. The overall share of clean power sources in generation investment was over 70% in 2017, partly stemming from the lower coal-fired power investment.

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Energy Investment Resized

Engagement on ESG issues by Dutch pension funds: is it reaching its full potential?

 Engagement, i.e. interactions between investor and investee companies, on ESG issues to influence practices and improve ESG disclosure is the main mechanism used to promote Responsible Ownership. This article provides an overview of a study conducted to assess the influence of engagements on overall ESG performance and the factors governing effective engagement. Dutch pension funds are used as a case study as the Netherlands has a well-developed socially responsible investment market for retail and institutional investors.

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ESG Issues Resized