ESG Challenges in the Green Decade

Implications of ESG and Net Zero Adoption

Commentators have suggested that the 2020s could be called the ‘Green Decade’ as ESG investing becomes mainstream and countries race to implement net zero policies to meet the 2030 deadlines.

This selection of papers looks at the opportunities and risks associated with the rapid adoption of ESG investing principles. Some also investigate the challenges and approaches being taken by countries and industries to comply with net zero targets.

Podcast: Real estate – Building a sustainable future (M&G Investments, 2021)

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

In this 20-minute podcast, Jose Pellier, Head of Investment Strategy, and Nina Reid, Director of Responsible Property Investment from M&G Real Estate, examine how the commercial property sector is responding to ESG issues amid rising expectations from investors.

Overcoming ESG Data Challenges (Intech, 2021)

Intech investigates the many challenges faced by investors and asset owners alike when integrating ESG data into investment processes and reporting.

The World in 2030: Investing for the next decade (Capital Group, 2021)

For compliance reasons, this paper is only accessible in the UK & Europe

Capital Group looks forward to 2030 and considers several investment themes that could come to dominate the 2020s including healthcare, renewable energy, and electric vehicles. 

Humans, a Growth Species (Baillie Gifford, 2021)

Hamish Maxwell, Investment Specialist, gets to grips with the unquenchable thirst for knowledge among humans and ponders some of the investment implications from our drive to know and do more.

Hydrogen Power – Enabling a virtuous decarbonisation loop (Candriam, 2020)

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

This paper from Candriam investigates the hydrogen technology cycle as part of the commitment by several European governments to build a world-leading industry and achieve carbon neutrality by 2050.

Active Stewardship vs. Divestment (RBC GAM, 2021)

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

RBC Global Asset Management compares the twin approaches of company engagement or divestment as investment strategies when addressing climate-related risks or opportunities with investee companies.

Infrastructure Opportunities in the Hydrogen Economy (QIC, Feb 2021)

QIC looks at the opportunities and risks presented by the hydrogen economy with a particular focus on the infrastructure investment required.

Long View: The green decade (DWS, 2021)

DWS introduces risk, return, and correlation assumptions for a range of ESG indices in their Capital Market Assumptions. On balance they suggest that returns over the next decade are likely to be modestly higher for equity indices adopting an ESG policy than traditional indices – and this might impact portfolio construction and asset allocation.

Valuing ESG: Doing good or sounding good? (Damodaran and Cornell, 2020)

The authors consider whether a decade’s worth of pressure from all sides on the corporate sector to ‘do good’ has created value for companies and investors.

Diversity, Equity, and Inclusion Require Action (Enterprising Investor, 2021)

In this piece for the Enterprising Investor publication, contributors from PNC Asset Management outline how they have made diversity, equity, and inclusion (DEI) a cornerstone of their investment management services.

ESG in DC Pensions Report (LGIM, 2021)

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

In this comprehensive report, LGIM unravels some of the complexities that have arisen within the DC pensions sector as the adoption of ESG and responsible investing principles have become more widespread. The report highlights how asset managers implement these policies and investigates the implications for longer-term returns.

The Geopolitics of Renewable Energy (CFA Institute Research Foundation, 2021)

As renewable energy grows in importance it has implications for natural resources, such as the industrial metals needed in batteries and renewable power technologies like wind turbines and solar farms. Investors need to be aware of the potential disruption that a commodity price shock could cause.

ESG and Asset Allocation (Verus Investments, 2021)

This paper from Verus Investments argues for the inclusion of an ESG approach not from the stock selection level, but from an asset allocation level. They argue that a more holistic approach could have far-reaching implications for investors – with portfolios making a greater positive impact.

Asset Owners & Energy Investment Toward Net Zero (LCP, 2021)

LCP’s paper suggests that investors consider the scale of the opportunity set in UK energy infrastructure over the medium term.

2030 Decarbonisation Challenge (Deloitte, 2020)

This report from Deloitte examines how certain energy intensive sectors could meaningfully accelerate decarbonisation over the next decade.