What's New(s) in ESG: July 9, 2018
Here are the top stories in ESG from the U.S., the EU and around the world.
Demographic Trends Are Driving Demand For Impact Investment - And The Industry Is Starting To Adapt
- According to a recent Global Impact Investing Network survey, investors committed more than $35 billion to impact investment deals in 2017, a 58% increase on the previous year; while total impact assets of its respondents were $228 billion, double the 2016 total. Part of this growth is driven by the changing profile of wealth holders, a function of broader demographic trends. Globally, we’re starting to see a huge transfer of wealth to women and millennials. According to the Boston Consulting Group, women are likely to hold $72trn of private wealth by 2020; that’s about a third of the global total, and more than twice as much as they held in 2010. Similarly, UBS reckons that $7trn globally will pass into the hands of millennials between 2017 and 2020. (Forbes: read more)
Most Affluent Investors Would Rather go to the Dentist Than Invest in a Company That Hurts the Environment
- Nuveen's "Third Annual Responsible Investor Survey" was conducted in the summer of 2017, and included two different groups of people in the US: 281 financial advisors, and over 1,000 affluent investors. The affluent investors surveyed included individuals with over $100,000 in investable assets and who work with a financial advisor. Seventy-six percent of the investors surveyed said they'd rather visit the dentist than invest in a company that pollutes the environment. Fifty-two percent of affluent investors said they would be somewhat or very likely to put all their holdings into responsible investing portfolios. (Business Insider: read more)
Better Data Lures Quant Firms to ESG Market
- Asset management analytics firm Cerulli Associates points out in a recent report that stronger quantitative data on environmental, social, and governance factors is luring quant asset managers into the ESG market, and providing more information for traditional asset managers as well. (ThinkAdvisor: read more)
Why Sponsors Include Sustainable Investing In 401k Menus
- Adoption of Sustainable Investing (SI) strategies, or those that integrate Environmental, Social and Governance (ESG) goals, has seen considerable growth in defined contribution plans. This growth has been primarily fueled by an increased appetite from participants, interest from plan sponsors to align DC menus with their corporate values, and a growing set of investment capabilities that fit the performance needs and values of investors. (401K Specialist: read more)
Climate Change Roundup: Investor Climate Action Initiative Expands
- More than 60 additional investors have signed up to Climate Action 100+, an initiative aimed at reducing greenhouse gas emissions. Climate Action 100+ launched in December 2017 with 225 investors on board and is now backed by 289 investors with nearly $30trn (€26trn) in combined assets under management, according to an update from the initiative. Asset owners such as Border to Coast Pension Partnership – a £43bn (€49bn) UK local authority pension asset pool – and Australian pension fund UniSuper are among the new signatories. (IPE: read more)
New Terrain: In Search of Social Justice Impact Investing
- Impact investing is still a fledgling practice in mainstream philanthropy, but its popularity is growing in a big way. While there are lots of enthusiastic proponents out there—extolling the idea of putting more wealth to work, or making an impact and making money—others (including on this very site) are questioning how deeply foundations should be diving into this approach. (Inside Philanthropy: read more)
Pope Francis warns against turning Earth into vast pile of 'rubble, deserts and refuse'
- Celebrating the third anniversary of his landmark environmental encyclical, which calls on humanity to profoundly change its relationship with the Earth, Pope Francis warned that climate change will turn the planet into “rubble, deserts and refuse” if left unchecked. The Pope has urged oil executives to lead the way on change, and has called for a meeting of top bishops to discuss the Church’s response to environmental threats. (The Washington Post: read more, The Guardian: read more)
When will “socially responsible investing” become just “investing”?
- With the continued growth of responsible investing as a percentage of overall invested assets, there will come a theoretical point where “responsible investing” just becomes “investing.” Based on recent research by Pictet Asset Management, the answer is: not yet. However, major investors of all stripes are beginning to pay more attention to investing according to global standards such as the UN Sustainable Development Goals, which will require trillions of dollars in funding in the coming decades. (Quartz: read more)
Legendary Investor's Embrace Of Sustainable Investing Is New, But The Movement Isn't
- Jennifer Pryce, President & CEO of impact investing pioneer Calvert Impact Capital, weighs in on hedge fund manager Paul Tudor Jones’ embrace of sustainable investing, pointing out that Jones’ fund may be new, but the ESG principles he has recently embraced have been practiced by investors for decades. (Forbes: read more)
China Must Nurture Impact Investing
- In impact investing, there are two goals. One is to pursue financial returns. The other is to have a quantifiable, significant and positive impact on society. Impact investing is in line with the development, coordination, green, open and shared-development concept that China’s high-quality economic growth needs. Impact investing in China is still in its infancy and needs support from society. The social benefits of impact investing are obvious, while the financial returns of the investments are long term. Investing institutions need to anticipate the expectations and risks of their returns on investments. We need to create a system to cultivate impact investing and help investors manage risk. (Caixin: read more)