Responsible Investing/ESG
The Wall Street Journal criticized ESG portfolios earlier this month for being dominated by big technology stocks. But we think technology stocks are integral to a responsible investing agenda when chosen as part of a well-defined process targeting companies that foster environmental, social and governance (ESG) improvements.
ESG investors, take note: a controversial new bond format that links a company’s sustainability goals to its bottom line could be a game changer.
As big tech and media companies face growing concern about the power of their businesses, more questions about environmental, social and governance (ESG) issues are likely to be raised. Social and governance issues deserve greater attention amid increasing regulatory scrutiny of industry giants.
Today, ESG issues may be more prominent in investors’ minds and approaches, but quality investors have been asking these questions for some time.
There’s growing evidence that private equity markets are beginning to overheat after several high-profile IPO flops. Investors in stocks should pay attention because private funding troubles are also a very public market affair.
Leading US CEOs recently pledged to redefine the role of the corporation in society. But will they make good on their promises? Responsible investors need a clear way to evaluate whether a company is really making progress by doing good for both society and investors.
Oil and gas producers are often seen as vulnerable to global efforts aimed at curbing climate change. But some European energy groups might become part of the solution to climate change rather than part of the problem.
Sustainable investing is often misunderstood. Many investors think a sustainable agenda limits a portfolio to a narrow piece of the market. In fact, plenty of stocks can help investors create social benefits while generating strong returns—if you know how to find them.
There are many ways to apply responsible investing principles to portfolios. But some investing approaches may be more conducive to creating a portfolio with strong environmental, social and governance (ESG) qualities than others. Concentrated equities are a case in point.
The United Nations Sustainable Development Goals (UN SDGs) offer a good guide for investing in companies making a positive impact on society. But where do you begin? Start by drilling deeply into the SDGs themselves to identify investible themes.
Creating a sustainable fixed-income portfolio isn’t just about avoiding harm–it’s about doing good. The UN’s Sustainable Development Goals provide a road map for selecting companies that offer products and services that help the environment and create a more equitable, just world.
Many equity investors want to help create social benefits while generating strong returns. Deploying a clear investment process that draws on the UN Sustainable Development Goals and integrates ESG factors in research can help investors achieve these twin goals.
From rising sea levels to catastrophic weather events, investors can’t afford to ignore the risks of climate change. Since many companies would be vulnerable if current climate forecasts materialize, asset managers may want to consider climate change in their equity research process and engage management teams on the subject.