ESG and Ethical Investing - Articles & White Papers
Articles and white papers on ESG and socially responsible investing. The most popular ESG research in this section provides practical advice for tangible implementation of ESG policy, for instance, exploring a framework to integrate ESG factors into portfolio construction, and how to integrate ESG into private equity. ESG surveys have been well received, and the list below includes a survey of European ESG funds as well as a report which examines how institutional investors incorporate ESG considerations when investing in alternatives. A commonly debated issue is the question of how ESG impacts investment returns. Can socially responsible investing deliver competitive performance, or does it hurt investment outcomes? This topic is well covered in this area of our library. Other research in this section includes papers on corporate governance policy, shareholder activism and the rise of activist funds. With environmental risks and climate change an increasing concern for investors, there are a growing number of papers on fossil fuel divestment. Furthermore, increasing attention is being given to how funds can actually use their investments to make a positive change for good, and papers on impact investing have proved popular, particularly in relation to endowments. This section also includes papers on faith-based investing such as Islamic finance.
Hermes discusses the supply chain for cobalt, the impact that cobalt mining can have on indigenous populations, and the increased demand for cobalt in lithium-ion batteries.
Since the turmoil of the financial crisis, investors are navigating a great calm in fixed income markets, however, there is a sense amongst investors that the prevailing period of calm is coming to an end as central bank intervention is withdrawn and investor behaviours subsequently change. Through conducting 79 face-to-face interviews with leading fixed income specialists across ...
Many researchers have studied the relationship between companies with strong environmental, social and governance (ESG) characteristics and corporate financial performance. A major challenge has been to show that positive correlations — when produced — provide explanations for the behavior. As the classic phrase used by statisticians says, “correlation does not ...
Physical climate risk
This whitepaper provides some of the tools that investors need to more accurately monitor and address the physical effects of climate change on investment portfolios. The objective is to satisfy institutional investors' growing desire for more climate resilient portfolios given the increasing frequency and intensity of natural disasters.
This 71-page paper by Deutsche Asset Management examines how activity in sustainable investing is gathering momentum. It looks into key trends such as asset owner demands, fiduciary duty, regulatory requirements, and climate change.
The adoption of ESG principles is picking up steam and moving into the mainstream, reflecting a view that ESG insights and perspectives can address multiple objectives. In this survey SSGA finds that, in addition to targeting positive social or environmental impacts, ESG criteria are increasingly seen as capable of improving investment returns. This 24 page document examines the ...
There is a growing trend, particularly amongst larger asset owners, to consider ESG factors within core investment processes. The level of sophistication varies between markets and institutions, but the momentum is clear. This seven-page study explores some of the perceived obstacles to applying an ESG framework to the stock selection process, and sets out practical ways of ...
Growing evidence of the positive economic benefits of increasing women’s participation in the workforce, along with new public and private initiatives to promote representation of women on corporate boards, is helping to fuel suggestions that allocating assets to companies with diverse leadership could have positive corporate performance outcomes. This article from FTSE ...
How can investors best understand and be comfortable with the risks they are taking? What are the types of risks they should be aware of? And what are some of the tools available to mitigate them? These are the questions our clients are asking.
This is the third paper in the Calvert-Serafim series. Companies are increasingly addressing environmental, social and governance (ESG) factors as part of strategic and operating decisions. Firms that perform better in some of those factors subsequently have better financial performance. However, there are limits to how much individual companies can accomplish in achieving progress ...
This white paper by MSCI explores five key trends that, in the authors' view, will shape how investors approach the ESG risks and opportunities on the horizon.
The first paper in the Calvert-Serafeim Series, The Role of the Corporation in Society: Implications for Investors, includes research and case examples along two major themes: The mechanisms by which sustainable business practices may impact financial valuations, including operational efficiencies, brand value, employee engagement, customer value, and cost of capital; and The ...
Various studies report that investing in “sin stocks”, that is firms which make money from human vice, such as alcohol, tobacco, gambling and weapons, has historically delivered significantly positive abnormal returns. This finding has inspired the hypothesis that sin stocks are being shunned to such an extent that they end up being systematically underpriced, enabling ...
The consideration of environmental, social and governance (ESG) issues in investing has grown in importance and developed in its implementation in recent years. Different terms, often used interchangeably, are used to express the various approaches: these include responsible investing (the term preferred at Invesco) and sustainable investing.
This study was commissioned by Future Fund, the Australian SWF. It aims compare best practices across leading asset owner funds with reference to benchmarks. The authors aim to reveal opportunities for idea sharing, development, and challenge between these funds. Eight specific focus areas emerge from the study: Culture, Diversity and EVP; Effective Decision Making; Long-Horizon ...
Regarding the contribution of socially responsible (SR) screening to mutual fund performance, we propose a new decomposition of the variability of SR mutual fund returns that isolates the contribution of SR screening, allowing it to be compared with other, traditional sources of performance. Our results, based on a sample of SR equity mutual funds, show that SR screening does ...
ESG and related types of investing are slowly but surely coming into the mainstream. Socially responsible investing (SRI), which involves screening out investments based on certain criteria, has been available for decades but investors are increasingly moving to a more nuanced approach of integrating qualitative ESG considerations into investment analysis.
Much of the investment industry has begun incorporating carbon emissions data into investment decisions, but the way forward is complex and requires analysis that goes beyond standard carbon emissions data. Investors who focus on simple solutions such as divestment or footprinting without considering these other factors may end up divesting shares of innovative companies and ...
There is a recommendation from the Financial Stability Board that asset managers now report on the carbon exposure in their portfolios to manage climate-related risks. This report assesses the carbon risks and opportunities of major global equity indices. A range of metrics reveals the carbon footprint of each index, alongside exposure to fossil fuels, stranded assets, and ...
Re-imagine getting “active”, beyond traditional notions of alpha. IQ explores ideas to add value across multiple dimensions of the investment lifecycle and how deeper strategic partnerships are helping to address today’s complex investment challenges.
