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ESG investing - making the world a better place?

ESG Investing - a societal force for good

There is a broad consensus that the institutional trend towards ESG investing, if wisely implemented, has the potential to change society for the better. The papers below highlight areas where this is the case; covering recycling, diversity, inequality, climate change and other areas of investment stewardship.

ESG windmill

Sustainability and recycling: investing for a circular economy (Hermes IM, 2018)
(For compliance reasons, this paper is NOT accessible in the US) 
Society’s addiction to plastics is pushing the environment to the limit. But behind the widespread demonisation of plastic itself lies the need for a paradigm shift in the way we produce and consume goods – one in which we can also participate as investors.

Broad Diversity as a Driver of Meritocracy (Invesco, 2018)
Invesco explains why diversity in the workplace is not merely an after effect of striving towards social justice, but a source of competitive advantage for corporations.

Incorporating UN SDGs into ESG Research via SASB Tools (Eaton Vance, 2018)
(For compliance reasons, this paper is only accessible in the US and Canada) 
This study elucidates Calvert’s efforts to translate the UN SDGs into the investor context in a meaningful fashion using the materiality matrix from the Sustainability Accounting Standards Board (SASB).

Video: ESG - When Should Investors Walk Away? (PineBridge, Jul 2018)
ESG engagement entails liaising with companies in an effort to persuade them to incorporate ESG issues into their core processes, but what should an investor do when the corporation won’t listen to their concerns?

Pulling away: Inequality as an ESG risk (Fidelity International, Apr 2018)
(For compliance reasons, this paper is only accessible in the UK and Europe)
This essay briefly examines the current state of wealth distribution, showing why inequality remains a significant sustainability risk - both at a company level and at a macro level.

Resource & Environment Issues: A guide for pensions actuaries (IFoA)
This guide help explains where Resource and Environment (R&E) issues are relevant to pension schemes and the work of pensions actuaries. It's been authored by the Institute and Faculty of Actuaries.

Perspectives on Climate Change (Wellington Management, Feb 2018)
In this paper, Wellington discusses the potential effects of climate change on clients’ investment portfolios. In light of the Paris Agreement, they mention 7 areas of potential investment opportunity as the world progresses towards a low-carbon and energy efficient environment.

Video: ESG - four underappreciated risks (Fidelity International, Feb 2018)
(For compliance reasons, this paper is only accessible in the UK and Europe)
Analysts at Fidelity International detail their experiences of underappreciated ESG-related risks – from telecom company data security issues to the macroeconomic implications of economic populism.

A Framework for Pension Fund Action on Climate Change (PLSA)
(For compliance reasons, this paper is only accessible in the UK)
This guide provides a programme of action for pension funds in order to further safeguard assets that they control, by discussing changes they can make to internal policies on ESG governance, reporting, investment, and engagement.

Investment stewardship for positive societal impact (Eaton Vance, Jan 2018)
(For compliance reasons, this paper is only accessible in the US and Canada) 
This report proposes that large institutional investors and asset owners, can and should act as “stewards of the commons”, collaborating on ESG issues not just for their own advantage, but for the good of society.