What's New(s) in ESG: August 6, 2018
Here are the top stories in ESG from the U.S., the EU and around the world.
The Wall Street Journal: SEC Drops Probe of Exxon’s Climate-Change Disclosures
By Dave Michaels & Bradley Olson
Securities regulators dropped an investigation into whether Exxon Mobil Corp. misled investors about its accounting practices and the risks that climate change and greenhouse-gas regulations posed to its business. The Securities and Exchange Commission in a Thursday letter informed Exxon that it closed the probe and decided against trying to penalize the energy giant over its disclosures and how it valued oil and gas assets.
Financial Advisor: Muddy Waters
By Karen Demasters
Impact investing is only one of the investing options for those who want to “do good” with their investment dollars. Among the labels put on this growing field of investing are “impact investing,” “ESG” (for environmental, social and governance) and “SRI” (for socially responsible investing or sustainable, responsible impact investing), a field that promotes companies affecting communities positively and avoids those companies with more troublesome records.
The Wall Street Journal: ‘Ethical’ Investing’s Smaller Niche: ETFs
By Ari Weinberg
ESG investing has surged in popularity, but it is still just a tiny sliver of the exchange-traded fund market, even with the recent addition of a fund from one of the biggest names on Wall Street. ETFs also have taken the investment world by storm in recent years. But these two trends have barely overlapped. Only $7.4 billion is invested across 54 ETFs that ascribe to an investing methodology that goes beyond the balance sheet, according to research firm XTF.
Investment Week: BlackRock Launches ESG Range of EMD Funds
By Laura Dew
BlackRock has unveiled a suite of four open-ended ESG-focused emerging market debt funds, using specialist benchmark indices created in collaboration with J.P.Morgan. The range consists of the BGF ESG Emerging Markets Bond, Emerging Markets Local Currency Bond, Emerging Markets Corporate Bond and Emerging Markets Blended Bond funds, which complement the group's existing EMD funds. The UCITS funds are actively-managed against the JESG EMD indices, an ESG benchmark launched in April by J.P. Morgan in collaboration with BlackRock. (Read more: CityWire Selector, Expert Investor)
Barron’s: eBay Founder Pierre Omidyar’s Group Wants to Help Prevent the Next Facebook Scandal
By Bill Alpert
Facebook and Twitter (TWTR) have both said they will boost spending to catch the bad actors among their billions of accounts. But some free help became available to the industry this week when a team of Silicon Valley ethicists unveiled a toolkit they hope will help tech firms avoid ethical debacles. The new website, which its creators have dubbed the Ethics in Technology Practice, is filled with advice and training materials. It was funded by Omidyar Network, a $1 billion impact investment firm in Santa Clara, Calif., started in 2004 by eBay founder Pierre Omidyar and his wife Pam. Concerned about technology's downside, as well as its upside, Omidyar Network commissioned the suite of materials from Santa Clara University philosophy professor Shannon Vallor and technology ethics experts at the school's Markkula Center for Applied Ethics.
Forbes: Report Finds Growing Interest In Impact Investing Among Wealthy Folks In Canada
By Anne Field
Impact entrepreneurs seeking funding: You might want to move to Canada. That’s one conclusion you might draw from Market Momentum: Impact Investing & High Net Worth Canadians, a recently released report from SVX, a Toronto-based impact investing platform. The report found that the vast majority of high net worth Canadians are interested in impact investing. Also many are already active impact investors or plan to increase their asset allocation to such investments over the next year.
Asia Asset Management: Southeast Asia is a Powerhouse for Impact Investing, Study Says
Southeast Asia was the fastest growing market for impact investing over the last ten years, spearheaded by Indonesia, Philippines and Vietnam, with state-backed lenders accounting for over 90% of the investments, a new report says. Although capital for such investments has typically come from North America and Europe, increasing participation by wealthy local families and high-net-worth-individuals is a “particularly promising trend”, according to the report from the Global Impact Investing Network (GIIN).
FundFire: Murky Regulatory Guidance Leaves Corporate Pensions Lost on ESG
By Fola Akinnibi
U.S. corporate pension plans have been slow to embrace environmental, social and governance (ESG) investments, and experts say that could continue to be the case until regulators make a clear declaration in support of these strategies. Only a handful of corporate defined benefit plan sponsors have incorporated ESG into their manager selection process, according to a recent NEPC survey. Both the U.S. Government Accountability Office (GAO) and the United Nations Principles for Responsible Investment (UN PRI) have also noted the lack of ESG adoption among U.S. corporate plans.
Forbes: 18 Impact Investing Trends You Haven't Seen Before And 1 You Have
By Devin Thorpe
Below are 19 trends in the impact investing world that are most likely unknown to you, because they are developing in pockets and corners of the arena where most people don’t have visibility. One or two of these may be familiar to readers who work in the space. One thing is generally recognized. Impact investing is growing. Quickly.
InvestmentNews: Why Investors Should Diversify More Than Just Their Assets
By Peter Grauer, Bloomberg LP
A global McKinsey study found that corporations with the most ethnically and culturally diverse boards were 43% more likely to experience higher profits. Similarly, companies with the most gender-diverse executive teams were 21% more likely to outperform on profitability. The Bloomberg Financial Services Gender-Equality Index, comprised of firms with a demonstrated commitment to gender equality, consistently has outperformed the MSCI World Financials Index. With this knowledge at hand, Vanguard, BlackRock and State Street have expanded their own diversification efforts to the companies they invest in.
InvestmentNews: 3 Ways Advisors Should Prepare for ESG Conversations with 401(k) Clients
By Aaron Pottichen, CLS Partners
Retirement plan advisers likely won't know when environmental, social and governance investing — also known as sustainable investing and impact investing — factors will be of interest to clients. That's why they need to develop a plan in the event clients want to discuss incorporating ESG into their investment menu. And since ESG investing is becoming more popular, chances are a client will come calling sooner rather than later. To help, here are three steps retirement plan advisers should be taking to prepare for these future conversations.