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/ESG: ESG Investments Are Now Mainstream And Core Portfolio Elements

October 26, 2020

Adrian Lowcock is head of personal investing at Willis Owen. He notes that ESG’s decisive outperformance during the last one, three, and five years shows the investing approach is here to stay.
Lowcock points to the 94.6% return from the MSCI ACWI ESG leaders index over five years compared to the 91.3% return from the MSCI ACWI index, as validation of his opinion.

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More Stories on ESG and Sustainability

Act Analytics Launches New ESG Portfolio Analytics Platform

January 27, 2020

Act Analytics announced the launch of a new Environmental, Social and Governance (ESG) portfolio analytics platform. The new platform allows RIAs to compare, contrast, and construct customized ESG portfolios. The new Act Analytics technology combines analytics and more than 200 ESG factors. It allows RIAs to “x-ray” securities, funds and portfolios to assess for ESG levels. They can also construct custom, values-based portfolios for clients. 

ESG: Mining Becomes More Responsible, But Needs To Do A Lot More: EgonZehnder

January 24, 2020

Miners have accepted that Environmental-Social-Governance (ESG) criteria will measure their commitment to sustainability and the impact of their operations on society.
Going a step further, mining companies have also come to realize that ESG compliance leads to the creation of shareholder value and attendant social benefits such as better working conditions. Further, they recognize that investors, employees and host governments will welcome those miners that have a record of credible ESG performance.
That ESG is causing a sea change in miners’ approach to societal obligations is apparent. But, says EgonZehnder, they should be doing more.

ESG: MSCI Chief Fernandez Warns ESG is a “Permanent Change in the Way Capitalism Works”

January 23, 2020

“We’re sounding the alarm bells, “ said MSCI chairman and CEO Henry Fernandez on CNBC’s Squawk on the Street. If you are an investment institution and you’re not embracing this and taking it into account, it’s going to be at your own peril,” said Fernandez. He warned ESG is a “Permanent Change in the Way Capitalism Works.”

ESG: ESG Investing at Inflection Point in 2020, says Nasdaq Head

January 23, 2020

It’s the 50th annual World Economic Forum at Davos. Nasdaq President and CEO Adena Friedman wrote in LinkedIn on Monday: “As we look ahead to a new year and a new decade, it’s far from clear that our world can be described right now as either cohesive or sustainable.” However, Friedman is enthused by the progress on ESG during 2019 and the prospects for it in 2020. Therefore, “2020 is increasingly looking like it may be the tipping point year for ESG investing,” said Friedman.

ESG: Best Buy’s CEO in the Dock for Alleged ‘At-Work’ Liaison

January 20, 2020

Current Best Buy CEO Corie Barry allegedly had a romantic relationship with a male colleague before taking charge as CEO in June 2019. Best Buy’s board is investigating the charge, made through an anonymous letter dated January 7.

Emission-Free Friday: Here are the Latest Funds to Push for Carbon Neutral

January 17, 2020

Carbon emissions dominated the headlines this week.

The European Commission has announced an ambitious plan to shift toward a green economy and make the EU carbon-neutral in the year ahead. The plan will cost at least one trillion euros over the next decade, require 25% of the EU budget, and involve a mix of private and public funds. EU chief Ursula von der Leyen called the project unprecedented.

ESG: Cerulli Report Says 2020 To Be “Pivotal” For Retail ESG Investing

January 17, 2020

New regulations, products, and money will make 2020 a banner year for ESG in Europe
Sustainable and responsible investing around the themes of Environment-Social-Governance (ESG) will come into its own in 2020 in Europe, says the latest monthly report by Cerulli. And demand impetus may come from retail investors, the report goes on to say.

Key Takeaways from the J.P. Morgan Asset Management “Global Alternatives Outlook”

January 17, 2020

The Global Alternatives Outlook was released by JPMorgan Asset Management this week. The report provides a 12-18-month outlook across key alternative asset classes. The report also the views of the CEOs, CIOs, and strategists from the firm’s 15 distinct alternatives investment engines. We take a look at the key takeaways from the report.

FTSE Russell Launches European Climate Risk Index

January 16, 2020

FTSE Russell has launched a new fixed income offering in Europe that weighs factors in each country’s efforts to mitigate climate change. The FTSE Climate Risk-Adjusted European Monetary Union Government Bond index is the first of its kind to measure these factors, according to the company’s press release today.

ESG: ValueAct Salutes the BlackRock “Climate Change of Heart”

January 16, 2020

ValueAct founder Jeffrey Ubben expressed his excitement this week that BlackRock chief Larry Fink had sounded an alarm around climate change. The founder of the $17 billion hedge fund has been one of the biggest supporters of ESG factors in corporate governance.

ESG: Lately-turned Tesla Bull Jim Cramer Adds Fink To The Mix

January 16, 2020

Larry Fink’s emotionally charged plug for ESG ticks all the investment boxes for Tesla.
According to Cramer, electric car maker Tesla could be a beneficiary of BlackRock’s new-found love for everything ESG.

ESG

Hedge Funds: BlackRock To Back Up ESG Rhetoric With Action

January 15, 2020

Change is afoot at BlackRock, the world’s largest asset manager. The firm is finally veering around to using its enormous financial and investment clout to push for climate action, according to Reuters.
BlackRock CEO warned in his annual letter to investee CEOs, titled “A fundamental reshaping of finance,” that “climate change has become a defining factor in companies’ long-term prospects,” and that markets have been slow to reflect the growing global concerns on climate change.

ESG: A Firm’s ESG Investments Could Launch a Virtuous Circle – ISS Report

January 15, 2020

There is a mutual cause-and-effect relationship between a firm’s ESG investments and its profitability, says a report by ISS ESG.
ISS ESG is the responsible investing arm of Institutional Shareholder Services (ISS). The ISS study found that those firms which invest in improving their ESG corporate ratings are also more profitable.

BlackRock Joins Climate Action 100+

January 10, 2020

Climate Action 100+, an investor network that is pushing for disclosures into carbon emissions, has inked BlackRock to its roster. The three-year-old investor group is pushing for commitments to reduce fossil fuel-related emissions. The world’s largest asset manager joins firms like CalPERS, Allianz, and UBS Asset Management.

Private Equity: Sustainability Ratings Provider EcoVadis Gets $200 Million Investment

January 10, 2020

The Environmental-Social-Governance (ESG) space commands a lot of investing heft these days. That much is evident from the confidence placed by CVC Growth Partners in EcoVadis, a provider of sustainability ratings for global supply chains. CVC’s investment of approximately $200 million is validation of its view that ESG is extremely important to business success over the long term.

ESG: Corporate Borrowers Beware; Banks Screening for ESG, Says Fitch

January 9, 2020

ESG bites into banks’ lending to corporates, says a report by Fitch Ratings.
Fitch Ratings fielded a survey in the third quarter of 2019 and received 182 responses from banks. The survey examined how environmental, social and governance (ESG) considerations are being incorporated into banks’ risk, financing, and prudential supervision frameworks.

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.