Hedge Funds

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.

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Alternative Investments: Lyxor Launches Suite of Paris-Aligned Equity ETFs

July 10, 2020

Lyxor Asset Management said in June that ESG ETF inflows were strong over the month of May, with EUR2.4 billion flowing in. That has set up a record for ESG ETFs for the year to date. It showed investors’ rising preference for sustainable investments, amidst global easing of lockdown restrictions and stimulus measures in Europe.
Perhaps addressing the trend, Lyxor announced this week a suite of equity ETFs for investors seeking opportunities in companies that align with climate-related carbon-reduction goals.

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More Stories on ESG and Sustainability

ESG: The SEC’s Scrutiny of ESG Investing Could Be a Blessing, Say Advisers

January 7, 2020

According to the Wall Street Journal, regulators are questioning the methodologies and criteria for the selection of companies by funds that tout ESG portfolios. ESG is an acronym for environmental-social-and governance observances. ESG investing is also known as impact, or socially responsible investing.
The SEC’s move may not be such a bad thing according to advisers, says InvestmentNews.

ESG: A Global Transition to 100% Renewable Energy Costs $73T; Payback 7 Years

December 27, 2019

A group of researchers at Stanford University, led by Mark Jacobson, has prepared detailed roadmaps for 143 countries that account for 99.7 percent of all global greenhouse gas emissions. These roadmaps provide for a 100% transition to wind-water-solar (WWS) energies and storage by 2050, and 80% by 2030.
The global cost? All of about $73 trillion as per the present value of capital cost. The payback is in under seven years, and comes with massive benefits

Alternative Investments: PIMCO’s New ESG-Focused ETF

December 24, 2019

Bond giant PIMCO has launched RAFE, a smart beta ESG ETF. Here’s another environment-social-governance (ESG) focused ETF from PIMCO, the leading fixed-income fund house. Offered in collaboration with Research Affiliates, the Pimco RAFI ESG US ETF RAFE will track the Research Affiliates RAFI ESG U.S. Index. Research Affiliates RAFI ESG U.S. Index The Pimco RAFI…

ESG & Sustainability: US Companies Bled $500 Billion From ESG Scandals

December 16, 2019

The Bank of America analyzed 24 scandals relating to accounting, data breaches, sexual harassment, and other ESG issues concerning companies in the S&P 500 index. It found that over the past five years, these issues, emanating from environmental, social, and governance (ESG) practices, cost the affected companies $534 billion in value.

Top-Flight Investors Back VC Firm Emphasising Diversity

December 11, 2019

A slew of high-profile investors backed Ada Ventures with $34 million. Ada Ventures will use the money to venture-finance UK-based tech entrepreneurs from under-represented groups.
Ada Ventures’ backers included TransferWise co-founder Taavet Hinrikus and later stage investment firm Atomico. Also investing were British Business Bank (the cornerstone investor), US-based Blue Sky Capital, Dubai-based Rasmala, and Silicon Valley law firm Wilson Sonsini.

High Net Worth Investors in the U.S. (and Their Next-Gen) Reach for ESG

December 5, 2019

A report by Cerulli Associates says wealthy American investors, as well as their next-gen successors, are considering ESG investing.
High net worth (HNW) investors in the US are increasingly gravitating towards environmental – social – governance (ESG) investment strategies, says Cerulli in their new report.

“Activist Wolf Packs” Could Close in on European ESG Laggards

December 4, 2019

The A&M Activist Alert is an analysis and predictor of shareholder activism in Europe. A&M used ESG ratings by Refinitiv of 1,300 European companies to segregate them into a ranking of four quartiles. Going back to 2017, A&M looked at each quartile to determine how many of its companies faced an activist attack. A total of 62% of activist targets across Europe since 2017 fall into the bottom two ESG quartiles, observed the study. Companies in these groups are, on average, 24% more likely to face an activist campaign.

Japan’s Mammoth Pension Fund Will No Longer Lend Shares to Short Sellers

December 4, 2019

Japan’s Government Pension Investment Fund (GPIF) feels a pang of ESG conscience and bans lending its foreign holdings to bears.
The GPIF fund will lose a small but lucrative stream of revenue from stock lending. It said the practice of stock lending lacked transparency. The identity of the ultimate buyer and their intentions are not known, the fund said.
GPIF’s move is said to be triggered by environmental, social and governance (ESG) considerations, and the resulting need to improve its image as an investor.

World Bank Re-Enters The Danish Green Bond Market; Six Nordic Funds Invest

December 3, 2019

World Bank issued its debut green bonds in Denmark in 1997, the first and longest maturity green bond issued in that market. After a hiatus of 22 years, the World Bank has returned to Denmark with a Danish green bond issue of DKK 3 billion (USD 441 million). Six Nordic funds subscribed to the issue.

Christopher Hohn: Activist Manager, Climate Warrior

December 3, 2019

Sir Christopher Hohn, the head of activist fund TCI, has demanded the companies improve their pollution disclosures. Those boards that fail to meet his demands will not receive his vote. In fact, he’ll vote against directors on issues like carbon emissions. 

Carbon Credit Generator EcoSecurities Back in Pioneer Moura Costa’s Fold

November 28, 2019

JP Morgan acquired EcoSecurities in 2009 for $220 million but sold it in 2013 to Mercuria, the global energy, and commodity group.
According to a Reuters report, Mercuria has now sold Ecosecurities back to Pedro Moura Costa and partner Pablo Fernandez for an undisclosed amount.

Alternative Investments: Money Managers Aren’t Meeting Climate Funding Goal

November 28, 2019

Asset Managers and Climate Change

The Arms Race in ESG Ratings: S&P Buys RobecoSAM Unit

November 25, 2019

The hot new sector of environmental, social, and governance (ESG) ratings is witness to a lot of deal activity this year. Investors, fund managers, and regulators are pressing for data on companies’ performance on ESG, as concerns mount on sustainability. It’s no surprise, therefore, that S&P just purchased the ESG ratings arm of RobecoSAM, for an undisclosed amount.

Facing Crowded IPO pipeline, Neptune Energy To Tighten ESG Belt

November 25, 2019

A BloombergLaw report said Neptune would explain to investors how its business will weather mounting environmental, social, and governance (ESG) concerns. According to this report, Neptune will publish for the first time, its ESG plan in its Annual Report around April 2020. Readying for an IPO means readying a low-carbon strategy, the article said.

Investors Concerned About Executive Compensation: Report From Farient Advisors

November 22, 2019

Engaged investors continue to be concerned about climate change, gender adversity, and pay equality, says a report from Farient Advisors and the Global Governance and Executive Compensation Group. Investors are perturbed about the disconnect between executive performance and ever-escalating compensation.

Bill Gates-backed Startup Announces Clean Energy Breakthrough

November 21, 2019

Heliogen, a startup backed by Bill Gates, announced a breakthrough solar energy technology that could be a boon for heavy industry. Heliogen uses artificial intelligence and mirrors to reflect and concentrate sunlight to generate ultra-high temperatures. Said to be The Holy Grail of clean energy, it generates no emissions and is cheaper than fossil fuels.

Commissioner Lee Focuses the SEC on a revamp of ESG

November 20, 2019

SEC Commissioner Allison Herren Lee wants the SEC to clarify its role and update disclosure requirements on ESG.
In prepared remarks addressed to the Investment Advisory Committee (IAC), SEC Commissioner Lee drew attention to investors’ growing interest in ESG. The IAC was meeting to consider the topic “Whether Investors Use Environmental, Social, and Governance (ESG) Data in Investment/Capital Allocation Decisions.”

Your ‘Feel-good’ ESG Fund is on a Tear: But Do You Know Why?

November 19, 2019

Investors should examine the underlying holdings of their ESG-focused funds to determine hidden portfolio risk.
CNBC’s Mitch Goldberg warns that a lot of the outperformance in many ESG funds has nothing to do with ESG factors. Instead, the credit for the ESG outperformance should go to the sizable component of technology stocks in these funds’ portfolios.
Technology stocks have significantly outperformed the broad market and maybe the hidden booster to your ESG fund’s performance.

Are Climate Change Disclosure Lawsuits Coming for Asset Managers

November 18, 2019

Mark McVeigh is an environmental scientist from Australia. Although he will not have access to his retirement funds until 2055, he is suing his pension fund. 

How Serious Should We Take ESG Investing in 2020?

November 15, 2019

Sustainable funds are hardly sustainable based on their carbon footprint. The Wall Street Journal reported Wednesday that eight of the largest 10 sustainable funds in the U.S. have oil and gas investments. 

This news comes as a way of criticism has hit the newest – and perhaps surprising fad in institutional investment. ESG funds are booming. They’ve taken in a record $13.5 billion in new money over the first three quarters of the year. That figure comes from Morningstar. But how sustainable are the investments in these funds?

Study: Activist Investing Spurs Innovation in Targeted Companies

November 14, 2019

A research study by Columbia Business School’s Professor Wei Jiang shows that activist investors help the cause of innovation in their companies. Prof Jiang is the Arthur F. Burns Professor of Free and Competitive Enterprise at the University. Third-party interventions can actually increase the longevity and sustainability of a company’s innovation.

CPPIB Reports 2.2% Return in the Second Quarter

November 14, 2019

The Canada Pension Plan Investment Board (CPPIB) reported gains of 2.2% during the second quarter. On Thursday, the nation’s largest public pension fund reported how it delivered the return.

Is Saudi Arabia Running Out of Money?

November 14, 2019

The Saudi Aramco IPO could be a ploy to raise money for a nation under financial duress. That’s the statement from former CIA chief David Petraeus in an interview with CNBC. Petraeus says that the nation needs to list its state oil company on the public markets in order to raise money.

European Money Market Funds and the ESG Juggernaut

November 13, 2019

Goldman Sachs Asset Management tweaks a money management fund for ESG, especially diversity.
Goldman Sachs is heeding the ESG clarion call from investors. The asset manager has introduced environmental, social, and governance criteria in a Euro money market fund.
The Low Volatility NAV money market fund has been “enhanced” for ESG considerations via a two-fold strategy.