Investors Are Advancing ESG Issues On All Fronts
Written by Alex Beveridge
The last big crisis - which I had a ring-side seat for back in 2008 - slammed the breaks on ESG investing. So I am happy to report that this crisis has only increased its relevance. Conversations with the Advisory Board for the up coming European Pensions Symposium and European Investment Roundtable have raised it as one the key things asset owners want to discuss with their peers and asset managers.
The COVID pandemic has deepened the sense of global interdependence and strengthened concern about environmental issues. Social problems in a host of countries have added to the focus on this arena.
As investors’ interest in sustainable and impact investing has grown, a vast number of investment managers have incorporated ESG considerations in their portfolio management. Moreover, a variety of ESG focused investment products have been introduced, including “sustainability bonds,” “green bonds” and “social bonds.”
The issue remains fraught however. Investors continue to debate the most effective way to implement ESG strategies, with the consensus moving from avoidance and divestment of specific investments to engagement with corporate managements in the hopes of influencing policies and practices. Most recently there has also been growing interest in impact investments - investments which exert a direct and positive force in advancing ESG goals.
Investors continue to differ in how they define ESG issues, how they evaluate investments through an ESG lens, and how this focus affects returns. Some warn that an ESG focus must inevitably have a negative impact on returns by limiting investment choices. Others argue that an ESG focus will, in fact, enhance returns over the long term because these investments are inevitably on the right side of history. Participants in Institutional Investor’s European Pensions Symposium & European Investment Roundtable, to be held in Copenhagen on 29 September -1 October 2021 will have an opportunity to discuss and debate differing approaches to these critical ESG issues among other topics..
For those solely focused on ESG investment strategies, join Europe’s leading ESG specialists and senior decision makers at the ESG & Sustainable Investments Forum in Amsterdam on 8 September 2021.