ESG and Sustainability
The rise of ESG factors in investment decision making will have a dramatic impact on returns and opportunities in the 21st century. A recent survey by LGT Capital Partners and Mercer showed that 57% of respondents believe that incorporating ESG standards into investment decisions will raise returns. Just 9% argued they reduce returns on investment.
Breakthrough Energy Ventures (BEV) is a venture capital firm that invests in cleantech. The term describes companies (or technologies) that aim to improve environmental sustainability including the negative impact of conventional technologies such as coal-fired power. It was established in 2015 by Bill Gates and a coalition of private investors concerned about climate change. The firm has just raised $1 billion (its second raise of that amount) from unnamed investors.
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More Stories on ESG and Sustainability
JBS S.A. (BVMF: JBSS3), the largest meatpacker in the world, has committed to maintaining a vigil against deforestation throughout its supply chain. The Brazilian company has been under pressure from investors and environmentalists because its beef production is leading to deforestation in the Amazon. Cattle owners have been known to clear forests to make way for pasture land.
RESOLVE is a Washington, DC-based NGO that seeks sustainable solutions to critical environmental, social, and health, challenges. It has partnered with AI software company CVEDIA to develop WildEyes AI, a camera-based solution to detect elephants and alert wildlife managers and communities. These warnings would prevent conflict situations between elephants and human settlements before they occur.
Sustainalytics Founder Michael Jantzi says people now want to do sustainable investing. And “they’re putting their money where their mouths are,” said Jantzi at the virtual Morningstar Investment Conference on Wednesday. The COVID-19 pandemic boosted an already strong movement in favor of sustainable investing.
James Cook University College of Science and Engineering senior lecturer, Mostafa Rahimi Azghadi, is overseeing a project to develop a new robotic sprayer for weeds in canefields. The sprayer will reduce the use of herbicides by up to 80% because it uses a targeted spraying method instead of a wider, “at-will” distribution. Herbicides in the water run off from canefields alongside river catchments connected to the Great Barrier Reef are a hazard.
“Access All” is a new, virtual, pitching event for founders from under-represented groups such as blacks, Asians, and other minorities. It is an initiative from a group of U.K.-based VCs to counter the inequities in the venture funding system as visible from a bias in favor of privileged and “more equal” founders, and against certain ethnicities.
DWS, one of the world’s leading asset managers, has launched a USD corporate bond ETF and a euro-hedged global equity ETF under its Xtrackers ESG banner.
The S&P 500 ESG UCITS ETF from UBS Asset Management was the first passive ETF to impart the Environment-Social-Governance (ESG) screen to the S&P 500 equity index. In a statement, UBS Asset Management said the ETF had passed the milestone of $ 1 billion in assets under management.
Rize is Europe’s first specialist thematic ETF issuer. The firm aims to provide investors access to the most ground-breaking megatrends shaping the planet, and to companies that have the potential to become the growth stories of tomorrow. It announced twin ETFs on the themes of sustainable food and digital education.
BMO Global Asset Management has expanded its range of 14 Responsible Investment products with the launch last week of the BMO LGM Responsible China A-Shares Equity fund. The ESG-oriented fund will invest in the top Chinese stocks that feature strong corporate governance and management of social and environmental issues.
The HSBC Asia Pacific ex Japan Sustainable Equity UCITS ETF is a low-cost, passive investing vehicle for exposure to Asia Pacific equities ex Japan. It tracks customized FTSE Asia Pacific ex Japan ESG Low Carbon Emissions Select Index, an index that integrates ESG (environmental, social and governance), carbon emissions, and fossil fuel reserves considerations.
ETFGI reports that inflows into global ESG ETFs and ETPs during the month of July were $6.76 billion. That brought the total inflows into these funds for the year 2020 to date to a record of $38.78 billion, more than triple the figure of $12.37 billion in 2019 at the same time. In another indicator of the bullish fervor in favor of ESG, inflows for the first seven months of the year have already far exceeded the inflows of $26.71 billion received during the entirety of 2019.
The webinar by the Bloomberg Women’s Buyside Network featured John Livanas, Chief Executive Officer, State Super; Geraldine Buckingham, Chair and Head of Asia Pacific, BlackRock; and Ludovic Subran, Chief Economist, Allianz. Bloomberg’s Executive Editor, Tracy Alloway, moderated the webinar.
Invesco finds on analysis of recent asset allocation trends that some major institutional investors including insurers, have already realigned their portfolios in favor of ESG strategies. What’s more interesting is that these sophisticated investors are taking increasing recourse to ESG-focused ETFs to give effect to their strategies for sustainable investments.
Loanpal, the fintech that is a market leader in financing of residential solar installations, announced Thursday that Blackstone (NYSE: BX) had committed to invest $300 million in solar loans originating on its platform. The amount committed will enable 10,000 homeowners to finance their solar systems, thereby reducing their homes’ carbon footprint.
ESG Investments to Gain Popularity in Real Estate As the environment becomes more of a priority among the public, environmental responsibility has become a priority for businesses and organizations as well. The looming effects of climate change are pressuring businesses and corporations to take action. Oil and gas companies in particular are facing increasing pressure…
A rush of inflows of $71.1 billion into ESG and sustainable funds globally between April and June this year pushed the AUM of such funds to a record $1 trillion, according to Morningstar. Investors have been drawn to such funds after the coronavirus outbreak.
Alternative Investments/ESG: DWS Launches Xtrackers II ESG EUR Corporate Bond Short Duration UCITS ETF
DWS addressed the rising demand for corporate debt laced with sustainable and socially conscious strategies with a new ESG-focused short-duration corporate bonds ETF.
The Euro-denominated Xtrackers II ESG EUR Corporate Bond Short Duration Ucits ETF tracks the Bloomberg Barclays MSCI Euro Corporate Sustainable & SRI 0-5 Year index.
Krane Funds Advisors LLC, which is the investment manager for KFA Funds and KraneShares ETFs, announced the launch of KFA Global Carbon ETF (NYSE: KRBN). The new KRBN ETF tracks carbon credit futures contracts through the IHS Markit’s Global Carbon Index.
State Street Global Advisors launched an ESG version of its blockbuster SPDR S&P 500 ETF Trust (NYSEARCA: SPY) that has AUM of $287.61 billion. The ETF has the best of both worlds from environment-social-governance (ESG) and the S&P500 stocks universe.
Watch for ETFs focused on ESG, climate change, and water resource stocks. Recent research from the BlackRock Investment Institute (BII) warns that investors have not factored in the potential risk from a growing global “water risk,” when demand for H2O exceeds its supply. Such a situation would be a fallout from the increasing evidence of…
The Impact Investing community is buzzing over Nuveen’s continued build out of its impact investing focus. Rekha Unnithan, who joined the firm in 2012 with the intention of investing in solving societal issues, says “Impact investing is now all of a sudden having its moment…It’s cool now and is getting a lot more attention. We…
Abu Dhabi-based Chimera launches the UAE’s first ETF tracking a Shariah-compliant index. The Chimera S&P UAE Shariah ETF is a sub-fund of the Chimera Umbrella Fund, the first SCA umbrella fund to be launched in the UAE. The ETF’s shares will trade on the Abu Dhabi Securities Exchange with gains reinvested into the fund while class B shares will be listed on the Dubai Financial Market with dividends distributed to investors.
ETFGI, the consulting and analytics firm that provides services around global exchange-traded products, released data on global trends for ESG in ETFs/ETPs during the first half of 2020. Inflows into these funds were US$3.49 billion during June 2020, bringing year-to-date net inflows to US$32.02 billion. These were more than three times the inflow of US$9.86 billion into ESG ETFs/ETPs seen in 2019.
The latest product from Inspire Investing in their series of faith-based ETFs further enhances their reputation for offering morally-inclined investors avenues for biblically responsible investing. Previous faith-based ETFs in the market have all been passive ETFs that track specified indices.