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What's New(s) in ESG: June 4, 2018

Dmitriy Ioselevich

Here are the top stories in ESG from the U.S., the EU and around the world.


  • ESG Investing Poses Big Challenge for Fund Management Industry: There is a device in cartoons in which a character finds a devil on one shoulder and an angel on the other, both trying to lure him their own way. It happened to Tom and Jerry, and now it is happening to the leaders of the fund management industry. The source of their dilemma is ESG (Environmental, Social and Governance) investing. (Financial Times: read more)
  • Hedge fund Managers Increasing Use of Responsible Investment Principles: Hedge fund managers have invested at least $59 billion globally using responsible investing principles, results of a survey of 80 investment management companies by the Alternative Investment Management Association and the Cayman Alternative Investment Summit showed. "Hedge funds have always been particularly active in the G (governance) part of investing within their strategies but we wanted to gauge the extent to which they also were incorporating the E (environmental) and S (social) elements in their approaches," said Thomas Kehoe, AIMA's London-based global director of research. (Pensions & Investments: read more, Financial Times: read more, FundFire: read more, AIMA: read more)
  • Could Impact Investing Replace Charitable Giving?: A new study by the Women’s Philanthropy Institute finds that both men and women embrace impact investing as a means of achieving social and financial returns. However, gender differences exist in how they approach impacting investing. (ThinkAdvisor: read more, IUPUI: read more)
  • Socially Responsible Investing Designation for Advisors to Debut This Fall: The College for Financial Planning will introduce a new designation, the Chartered SRI Counselor, for financial professionals this fall, in collaboration with the US SIF: The Forum for Sustainable and Responsible Investment. According to US SIF, more than 20% of assets under management in the U.S., some $8.7 trillion, are now involved in socially responsible investing strategies. “Investors of all kinds are clamoring for more information about sustainable investment and corporate responsibility, and this program will be a trusted resource for planners,” said CFFP President Dirk Pantone, in a statement. (ThinkAdvisor: read more)
  • How Companies, Governments and Nonprofits Can Create Social Change Together: Profit and purpose are converging. Over 80% of millennials report that making a positive difference in the world is more important to them than professional recognition. They no longer believe the primary purpose of business should be to make profit, but rather to create social value. On the investor side, more and more shareholders demand tracking and reporting of both positive and negative externalities, compelling some of the largest corporations on earth into action. Customers overwhelmingly prefer products tied to a social cause. A significant majority of citizens want changes to how society governs itself—and therefore how problems get solved—and also changes to the corporate status quo. Not surprisingly, more and more businesses are becoming certified for their social responsibility practices. (Harvard Business Review: read more)
  • Corporates Chase Impact and Innovation with Venture Investments: No sooner had ImpactAlpha called the trend in corporate venture capital’s move into impact investing than came a flurry of deals that confirmed the rising “strategic” value of inclusion, sustainability and impact in corporate C-suites.  In those two months, we’ve reported at least one corporate venture deal of note per week, across cleantech, food and agriculture, and inclusive financial services. Corporations, from Salesforce and Tyson Foods to the oil giant BP, are backing impact ventures as a way to tap innovation, access new markets, and drive their own efforts at inclusion and sustainability. The deals have spanned Israel, Mexico, Brazil and India, as well as the U.S. (ImpactAlpha: read more)
  • RBS Cuts Lending to New Coal and Arctic Oil Projects: Royal Bank of Scotland will no longer fund Arctic oil projects and has pledged to cut lending to firms profiting largely from coal as part of an updated energy policy. The changes cover the mining, power and oil and gas sectors and are aimed at taking a tougher line on climate change. They mean the bank will not provide “project-specific finance” to new coal-fired power stations, new thermal coal mines, oil sands or Arctic oil projects, or those involved in “unsustainable” vegetation or peatland clearing. RBS will also tighten restrictions on general lending to mining firms that source more than 40% of their revenues from thermal coal, and power companies that generate over 40% of their electricity from coal. (The Guardian: read more)
  • MEPs Back Resolution on Sustainable Finance: MEPs have backed plans to align EU capital markets to long-term sustainable goals. The resolution on sustainable finance was adopted on Tuesday by 455 votes to 87, with 92 abstentions. The initiative stresses the need for financial markets to facilitate the transition to a sustainable economy, with particular emphasis on establishing a policy framework that guides investments towards decarbonised, disaster-resilient and resource-efficient economic activities. Proposals include financing public investments required for the transition to a sustainable economy, encouraging divestments from unsustainable energies and phasing out subsidies to fossil fuels. (European Parliament: read more) (European Commission: read more) (IPE: read more) (P&I: read more) (Market Mogul: read more)
  • PetroChina, ICBC Among Top Chinese Firms Embracing ESG Principles and Giving Stock Investors Better Returns: Shares in some Chinese firms that have high scores in a global ranking of environmental, social and governance (ESG) criteria have been outperforming others in the past year, in a sign of a shifting focus toward sustainable investing among mainland Chinese investors. In the rankings of 6,500 companies globally, compiled by Thomson Reuters, PetroChina holds the highest score among Chinese firms for ESG, while Industrial and Commercial Bank of China and Citic Bank were also top performers. (South China Morning Post: read more

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