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ESG in the Investment Process: From Backwater to Mainstream

World Economic Forum Edition….The Greening of Davos

To coincide with the World Economic Forum's 2020 Davos meeting entitled 'Stakeholders for a Cohesive and Sustainable World', Savvy Investor has collated a selection of recent ESG-related content. This includes an upcoming ESG webinar and conference from Reuters Events, together with a selection of papers that illustrate why ESG is being successfully integrated into the investment process and decision making.

Specifically, the focus is on content that evaluates how ESG factors may lead to improved investment returns, whilst also outlining the potential risks (e.g. financial or reputational) that investors may face, should they continue to ignore ESG as an integral part of their investment process.

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WEBINAR AND CONFERENCE


ESG Webinar 29 Jan 2020 - Unlocking Financial Materiality (Reuters Events)

Reuters Events hosts this interactive webinar which will discuss key practical steps that asset managers are already making to secure financial returns through improved evaluation of ESG factors. There is a follow-up conference 27-28 May 2020, further details below.

Conference by Reuters Events: ESG Investment Europe (London) 27-28 May 2020

Reuters Events hosts the two-day ESG Investment Europe conference 2020 on 27-28 May. Co-located within The Responsible Business Summit Europe, this is the only conference that will challenge all speakers to share how they're changing strategies, investments and technologies now, to deliver against the 2030 and 2050 horizons.


ESG PAPERS


The Impact of ESG Investing in Emerging Market Equities (Candriam, 2019)

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

Candriam seeks to answer the question as to whether ESG factors add value to financial returns from EM equities.

Financial quality metrics and ESG factor interactions in equities (Eaton Vance, 2019)

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

This paper by Eaton Vance investigates the relationship between financial quality metrics and ESG scores, and seeks to improve portfolio performance by better understanding the dynamics between Quality and ESG.

Shifting Perceptions: ESG Credit Risk and Ratings (PRI, 2019)

In this report, PRI investigates how the fixed income community is integrating sustainability considerations when allocating capital and managing risks.

ESG Investing: Can You Have Your Cake and Eat It Too? (Enterprising Investor blog, 2019)

In this post for the CFA Institute's Enterprising Investor blog, Gautam Dhingra, PhD, CFA and Christopher J. Olson, CFA examine whether selecting stocks with high ESG scores does indeed result in increased returns for investors.

How ESG Engagement Creates Value for Investors and Companies (PRI, 2018)

PRI commissioned this report which explores how ESG engagement translates in additional value for investors.

Materiality Matters: Targeting ESG issues that impact performance - the material ESG score (Russell Investments, 2018)

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

Russell Investments devise a new method of measuring a company's ESG score which takes into consideration only those ESG issues which are financially significant to a company.

Global Emerging Markets: ESG Materiality, Q2 2019 (Hermes IM)

In this new publication, Hermes IM demonstrates its engagement activity with investee companies in emerging markets, and suggests ways in which such an ESG approach may be applied to the EM equity class.

Sovereign Environmental, Social and Governance Data Platform (World Bank, 2019)

The Sovereign ESG Data Portal from the World Bank aims to address several objectives. It provides a framework of ESG indicators drawn from multiple sources and World Bank programs while also offering tools to improve understanding of available data and providing a context for ESG data.

ESG financial materiality: Integrating ESG into fixed income investments (HSBC AM, 2019)

HBSC's paper analyses ESG-related risks and opportunities for fixed income investments using a purely fundamental perspective.

Using alternative data to spot ESG risks (MSCI blog, 2019)

MSCI outlines how using alternative datasets (e.g. flood maps, satellite imagery) can bring fresh insights into potential future event risks.

Managing Tail Risks through Active Integrated ESG investing (Allianz Global Investors, 2019)

Allianz Global Investors Global Head of ESG Research Dr Steffen Horter outlines how managing ESG tail risk can result in sustainable investment performance over a market cycle.

Combining Performance and Impact in Fixed Income (SSGA, 2019)

SSGA suggests ways in which investors can successfully integrate ESG into fixed income investing while outlining potential challenges.

Video: How ESG Integration Adds Value in the Investment Process (Natixis IM, 2020)

Amber Fairbanks, Portfolio Manager at Natixis Investment Managers, outlines in this video how ESG is integrated into the investment process.

How ESG is shaping investment value in commercial real estate (Knight Frank blog, 2019)

Knight Frank outline ways in which ESG considerations play a much more significant role in investment decisions and how these can influence value creation in several ways.

ESG and Alpha: The Role of Materiality (Causeway Capital, 2017)

In this report, Causeway Capital investigates whether a trade-off between return performance and ESG investing does exist.