Sustainable & Responsible Investment and Asset Manager Perspectives – Today, and Quo Vadis Over the Coming Years…




Sustainable & Responsible Investment and Asset Manager Perspectives – Today, and Quo Vadis Over the Coming Years…

The terms of reference are familiar now to many more institutional owners and their managers (as well as to a growing number of retail investors who are their clients and beneficiaries). This movement began as “socially responsible investing” (“SRI”) which evolved over time to “sustainable & responsible investing” and on to “sustainable & responsible & impact investing” in the 21st Century.

In recent months we’re increasingly hearing and using the simplified term “sustainable investing” and “ESG investing”.

The progress is welcomed!  Our esteemed colleague Erika Karp at Cornerstone Capital Group here in New York (she was formerly managing director/head of Global Sector Research at UBS and is one of the founders of SASB) has been saying for some time at public conferences that one day we’ll just be talking about “investing” -- and it will all be what today we’re describing as “sustainable investing”. 

So how do investors – the world’s trusted fiduciaries and intermediaries – feel about sustainable investing?  According to Schroder’s “Institutional Investor Study 2019 – Geopolitics and Investor Expectations” – belief is very high and the proportion of investors worldwide who do not believe in sustainable / ESG investing fell to just 11 percent (from 20% in 2017); the decline was most notable in Latin America (falling to 12% from 29%).

The survey respondents:  pension funds, insurance companies, sovereign wealth funds, endowments, foundations – 650 in total, managing US$25 trillion in assets from 20 global locations.  According to Schroder’s survey of these entities, the “cynics in the asset management sector” fell by 50% in just three years of the survey effort.

Geographic spread of responses:  27%, North America; 38%, Europe; 27%, Asia-Pacific; Latin America, 8%.

Key numbers:  52 percent cite macro and geopolitical risks as greatest concern; 52% look to increase their exposure to private assets; 53% need customized solutions to meet their needs; 67% believe annual total returns will remain above 5% over the next five years; and, 75% believe sustainability will play a more important role over the next five years.

This is an important point to underscore:  Three quarters of respondents expect sustainable investing to grow in importance over the next five years (up from the base of 67% in the 2017 survey effort). 

There are still asset managers doubting the value of sustainable investing – almost one-in-five (19%) of investors responding said they do not invest in sustainable investing funds.

Sixty-seven percent of North American survey respondents said greater transparency and better ESG data and benchmarks were important.  At G&A Institute we’re hearing this argument every day among our capital market colleagues and this is why the major ESG ratings agencies and ESG information providers – such as MSCI, Sustainalytics, Bloomberg, Thomson Reuters/Refinitiv, Vigeo Eiris and ISS -- have been strengthening their systems and enhancing their methodologies to meet increasing investor-clients’ demands. 

We have been successfully working with our corporate sector clients in helping them better manage their ESG data and related information in the effort to improve the information available to the rating agencies’ for rankings and data sets in a more efficient and effective manner. 

hese efforts help the corporate issuer to better represent themselves as a sustainable investment candidate and to make sure they do not get passed over by the dramatically-growing pool of asset managers now focused on corporate ESG as key factors in financial analysis and portfolio management. 

The Schroder’s results as revealed in their latest investor survey are good news all around, we would say!

Schroder’s Global is a 200-year old investment management firm working with institutions, intermediaries and individuals, managing $500 billion-plus in assets for 5,000 people on all continents.

This week’s Top Story is a review of the Schroder’s report for asset managers as published for the readers of Chief Investment Officer.  Information about the Schroder’s report is also available to you here and here.
https://www.schroders.com/en/sg/institutional-investor/insights/institutional-investor-study/
Each week as part of our Highlights content we bring you news of ESG / Sustainable & Responsible Investment from global sources.

Adding Considerable Value to This Discussion:
Business Insider shared the results of the Merrill Lynch - Bank of America survey of investors. These are the top 10 reasons investors and companies should care about ESG investing. You can read highlights here.

 

Top Stories

Sustainable Investment Skeptics are Becoming Believers
Source: Chief Investment Officer - The doubters of sustainable investing are rapidly dwindling in numbers, according to a study by asset manager Schroders, which found that cynics of the sector have fallen by nearly 50% in just three years.

 

Sustainability Standards Setters & Policy Makers

Enhancement to Sustainability Rating Emphasizes Material ESG Risk
Source: Morningstar 

Quantifying Sustainability Impacts and Setting Meaningful Goals
Source: Sustainable Brands 

Speeding up the transition towards sustainable cities  
Source: Techplore 


ESG / Sustainable & Responsible Investment

MSCI to launch two series of provisional EU Climate Indexes 
Source: MSCI

GRESB and Verisk Maplecroft Launch the Climate Risk & Resilience Scorecard 
Source: MSCI GRESB

Buy Side Eyes Mandated ESG Disclosures
Source: Markets Media 

Sustainable Investing: Debunking 5 Common Myths
Source: Visual Capitalist 
E-Waste Is Becoming A Sustainability Disaster. And Investors Have Taken Notice.
Source: The Rising 

Global Sustainability News: Forward Momentum!

Everyone Is Talking About ESG: What Is It and Why Should It Matter to You?
Source: Forbes 

Can China Balance Consumerism with Sustainability?
Source: Alizila 

Sustainable solutions offer big challenges to food processors
Source: Food Engineering 

Retail Seeks More Loyalty From Sustainability-Minded Shoppers  
Source: Pymnts 

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Corporate Sustainability / ESG

The New Climate for Business 
Source: BSR

The Case for Prioritizing Net Zero Carbon Emissions, Especially in Value Chains 
Source: BSR

The State of Sustainable Business 2019: Toward a Critical Decade 
Source: BSR

ESG Notebook: How Companies Are Getting To Profitable Sustainability
Source: Forbes 

The Estée Lauder Companies Releases Fiscal 2019 Corporate Responsibility Report
Source: Sustainable Brands 

McDonald’s Unveils Two New Sustainability Initiatives That Could Power 2,500 Stores
Source: The Rising 

Big chocolate makers still falter in holistic sustainability, says Green America in annual chocolate scorecard
Source: Confectionery News 

Dell announces new sustainability targets
Source: Consumer Affairs 
Maple Leaf Foods becomes First Major Food Company in the World to be Carbon Neutral
Source: PR Newswire 


Sustainability Matters!

101 Ways to Live More Sustainably
Source: Curbed 

Why seizing sustainability makes sense
Source: StoreBrands
 

Can Singles’ Day Be Sustainable?
Source: Fortune 

Achieving the benefits of a retail sustainability strategy
Source: Retail Customer Experience 

Sustainability Data

Silicon Valley Slumps in Sustainability Supremacy, Study Shows
Source: Environmental Leader 

Sustainability Now Drives More Consumer Purchasing Decisions, According to New Data from 2019 Paper & Packaging Consumer Trends Report
Source: CSR Wire 

 

The Sustainability Highlights eNewsletter is prepared by Governance & Accountability Institute, Inc. based on continuous monitoring of trends and developments in Sustainability and ESG. Copyrights for other providers are noted where appropriate. Please credit the source if quoted. Content © 2009 - 2019 - All Rights Reserved.

Governance & Accountability Instiute is the "Sustainability Headquarters™" for clients in the corporate, investment, public and social sectors. Based in New York, G&A is a for-profit consulting organization providing a range of value-added strategies, services and resources related to ESG & sustainability to clients in the corporate and capital markets communities. For G&A's full range of services, click on each of the links: Sustainability / ESG Consulting Services, Communications & Recognition Services, Investor Relation Services. For more information, visit www.ga-institute.com or contact us at 646.430.8230 or info@ga-institute.com.