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The ESG Pinwheel

  • ,  Chief Executive |
  • 30 Sep 2020
  • Updated 01 Oct 2020

A Regular Cornucopia of ESG Topics

Investment flows continue to pour into ESG products, perhaps aided by increasing amounts of ESG-related regulatory requirements for both European and U.S. investment firms. The news cycle also plays a role in keeping environmental and social inequality issues front and center in the eyes of the public. Interestingly, active funds tend to dominate the ESG space, though recent evidence suggests that passive ESG is gaining market share.

This latest selection of ESG papers covers a wide range of topics, ranging from the impact that Europe's green fiscal stimulus policies might have on EU GDP growth, to impact investing in U.S. real estate, to building climate change expectations into the overall investment process. Given that passive ESG investing seems to be on the rise, there is also a fascinating deep dive into one of the indices frequently used for benchmarking ESG funds.

ESG pinwheel


Green Fiscal Policies in Europe: Macro effects (PGIM Fixed Income, Sep 2020)

This paper from PGIM Fixed Income investigates Europe's attempt to boost Euro-area GDP via fiscal stimulus packages that have a robust climate change agenda.

Gold Mining and the UN Sustainable Development Goals (World Gold Council, 2020)

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

World Gold Council showcases the efforts made by leading gold mining companies to attain the UN Sustainable Development Goals.

The S&P 500 ESG Index: The sustainable core (S&P Dow Jones Indices, 2020)

Recent data suggests that the amount invested in ESG ETFs and ETPs now exceeds $100bn, with $40bn invested during 2020 alone. This paper from S&P Dow Jones Indices highlights the features of the S&P 500 ESG Index, which is often used by both active and passive products as a core benchmark for ESG portfolios.


How to Build a Climate-Adjusted Government Bond Index (FTSE Russell, 2020)

In this paper from FTSE Russell, they illustrate how, using the methodology underlying the FTSE Advanced Climate World Government Bond Index, sovereign bond investors can factor in climate risks when constructing portfolios.

Climate Change Analysis in the Investment Process (CFA Institute, 2020)

CFA Institute notes an information deficit within the investment profession and seeks to educate and inform with their report on climate change. Case studies and survey data illustrate the economic effects, while information about how to integrate climate risk into the investment process is also offered.

Climate Data, Decarbonisation & Portfolio Construction (State Street, Sep 2020)

In this paper from State Street, they outline how climate change metrics can vary significantly, potentially resulting in different portfolios with a wide variance of risk-return profiles.

ESG Disclosures: The bedrock of the sustainable finance agenda (Invesco, 2020)

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

Invesco's paper argues for more significant disclosures from companies based upon reporting standards. These would assist in consideration of ESG risk at a much more granular level - even down to an individual company level.

2020 ESG Distribution Study (Kurtosys Systems, Sep 2020)

Kurtosys Systems' 2020 Study investigates the state of sustainable investing in the funds market across several jurisdictions in anticipation of significant regulatory changes in the pipeline. It finds that while significant progress has been made by some in integrating sustainability into the core of the funds industry, additional investment in data. process, personnel, and technology will be required by many industry participants in order to compete effectively in the 'new world' of responsible investment.

U.S. Real Estate Impact Investing: A primer updated (PGIM Real Estate, Aug 2020)

PGIM Real Estate's paper is an updated primer for those considering real estate impact investing for the first time. They examine the principles of impact investing, how to measure the social performance of impact investments, and the wide range of opportunities available for U.S. real estate impact investors.

Social Media: Don't feed the troll (Aviva Investors, Sep 2020)

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

Editing content while being mindful of freedom of speech concerns is a unique social (and governance-related) issue for modern-day social media companies. Aviva Investors explores this interesting issue in a lengthy blog article.