Investors increasingly claim to be incorporating ESG factors into their portfolios. But are they doing so genuinely and for the right reasons, and what should best practice entail in ESG integration? The concept is still vague, with a clear definition some way off.
Frameworks such as the UK’s Senior Managers & Certification Regime may be adapted – and expanded to sectors beyond financial services – to put company directors on the hook for climate-related commitments.
Under fire for their lack of transparency and buying of out-of-favour fossil fuel assets, private equity managers are being urged by their clients and others to use their capital and clout more positively.
With the US Congress divided over proposed climate and infrastructure bills, and plenty of financial sector opposition to President Joe Biden’s plans, major North American retirement funds stress the need for environmental policy stability.
While banks prefer to hire former bankers for ESG jobs, there is a strong demand for individuals with sector-specific, non-financial backgrounds, Capital Monitor analysis reveals.
A recent essay by the former global head of sustainable investing at the world’s largest asset manager poured scorn on the climate claims of ESG investment strategies. But experts argue that while ESG investing is far from perfect, it still has a significant role to play in helping to achieve net zero.
Hopes are rising that asset managers will become more open to implementing British pension schemes’ voting preferences in light of new, less prescriptive recommendations from a government-backed taskforce.
The second-biggest US pension fund’s sustainability and stewardship director, Kirsty Jenkinson, outlines new strategies to decarbonise its investment portfolio and improve diversity in the corporate world.
The year to date has seen record-breaking support for shareholder resolutions, with asset managers such as BlackRock and Vanguard stepping up their stewardship. However, a lack of data on the real-world impact means the jury is still out on their efficacy.
The debate over how the fiduciary duty to seek the best returns affects ESG investing – and whether it should do – has intensified lately, with prices of both sustainable assets and many 'dirty' investments soaring.