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Embrace and Engage: Everyone's a Winner!

Does Being Responsible lead to higher profits?

ESG issues embrace a diverse range of subjects, ranging from environmental impact through to corporate governance. Despite this wide variation, a growing body of research appears to support the theory that adoption of sustainability principles may support higher valuations for those companies who 'embrace and engage'. However, adoption of ESG principles varies both by country and company; such market inefficiencies leaves scope for investors to exploit such anomalies.

The adoption and integration of ESG principles into the investing process is becoming mainstream.  Meanwhile, the adoption of ‘Responsible Investing’ values by investee companies may lead to market recognition in the form of higher valuations.  Savvy Investor has collated several of the best white papers which examine a range of ESG issues and how adoption by companies of sustainability initiatives might offer investors superior returns.

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FEATURED PAPERS


Are climate models reliable investment inputs? (Wellington, 2019)

Climate change models should begin to inform and influence the investment process, according to this paper by Wellington.

Sustainable business: The path to a strategic edge (Eaton Vance, 2019)

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

As companies embrace sustainability, can those practices provide a competive edge? Eaton Vance investigates.

Responsible Investment as a Motivator for Generation DC (Franklin Templeton)

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

For those people who will rely on their DC pension, Franklin Templeton suggests that responsible investing can be used by providers as one way of engaging with that demographic.

Rethinking ESG Investing: Core-Satellite Framework Q&A (QMA, 2019)

QMA presents potential solutions to some of the challenges found in ESG investing.

Global Perspectives on responsible Investing (Aon, 2019)

Aon offers insights from their reseach into institutional attitudes towards, and approaches to, responsible investing.


ESG: DOES IT LEAD TO HIGHER RETURNS?


Responsible investing - The world tour (DWS AM, 2019)

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

DWS takes a tour around the globe and illustrates the various approaches to responsible investing and how adoption levels at a country level can be very different.

Corporate Governance, ESG, and Stock Returns around the World (Financial Analysts Journal, 2019)

The CFA investigates ESG in the context of company financial performance and suggests that new metrics may offer potential insight into future stock returns.

Emerging markets: no (r)ESG, no fun (Vontobel AM, 2019)

Vontobel suggests that investors may be able to obtain superior returns from an EM portfolio with strong ESG credentials.

Corporate Governance in EMs: Harnessing Winds of Change (Franklin Templeton, 2019)

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

Emerging Markets investing can offer investors additional investment opportunities; Franklin Templeton postulates that improving corporate governance practices are one factor that may have contributed to enhanced returns.

ESG focus: Will South Korea's chaebols change their spots? (Aviva Investors)

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

Aviva Investors investigates how adopting ESG principles may eventually improve the perception of, and financial returns from, Korean conglomerates.


CLIMATE CHANGE ISSUES


Decarbonization Factors (State Street, 2019)

State Street finds that strategies which focus upon decarbonization can offer investors the potential for alpha generation.

Are electric utilities’ governance and strategies fit for the energy transition? (Robeco)

Engagement with electric utilities: Robeco and Lyxor offer their insights.

Climate risk in private real estate portfolios: What’s the exposure? (MSCI)

MSCI examines the vulnerability to climate-related events for the private real estate market in 5 countries.


ESG INTEGRATION IN THE INVESTMENT PROCESS


Evolution of Sustainable Investing and the case for integration (Vontobel AM)

Vontobel examines the rise in sustainable investing and offers its findings on one approach to implementation.

Podcast: Weaving the SDGs into investment processes (Hermes IM, 2019)

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

Hermes takes a look at SDG (Sustainable Development Goals) and suggests how they can be integrated into the investment process.

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