January 2022
14Jan

Conflicts and Opportunities for Pension Fiduciaries in the ESG Environment

By Susan N. Gary Acting as prudent investors, pension managers should consider financially material factors that affect the risk/return profile of funds. Material environmental, social, and governance (ESG) factors may affect financial performance by identifying opportunities and risk, so it would seem prudent to consider those factors when making decisions in the best interests of plan beneficiaries. In June 2020 the Department of Labor (DOL) proposed a rule that appeared to be an attempt to curtail consideration of ESG factors....

January 14, 2022
Articles, Investment, Pension Management, ,
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06Jan

The Asymmetry in Responsible Investing Preferences

By Jacquelyn Humphrey, Shimon Kogan, Jacob Sagi & Laura Starks We design an experiment to understand how social preferences affect investment decisions through stock allocations and probability assessments. The major preference channel is asymmetric in social outcomes – although negative and positive responsible investment (RI) externalities have the same magnitudes, negative externalities have greater impact on investment choices. The effect is persistent, but heterogenous. We also find asymmetries in belief formation and learning constitute a secondary channel. Overall, our results...

January 6, 2022
Articles, Investment,
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December 2021
29Dec

Green Finance: A Shift Towards Sustainable Economic Growth

By Bazgha Khan & Noria Farooqui Green finance refers to the financial arrangements that are specific to the utilization for projects that are environmentally sustainable or projects that adopt the aspects of global climate change. It’s to extend the level of financial flows from banking, micro-credit, insurance and investment, the public, private and not-for-profit sectors to sustainable development priorities. United Nations Environment Program (UNEP) has been working to align financial systems to the 2030 sustainable development agenda to direct financial flows...

December 29, 2021
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11Dec

Asset Allocation: Glide Path Design for Target Date Retirement Funds

By Thomas Present & Sharon Persyn In this thesis, we discuss and compare target date retirement fund strategies that have been used in recent literature. These strategies include the 100% equity, glide path, maximum drawdown, risk budget and target return strategy. We conduct sensitivity analyses in order to obtain optimal parameters for the different strategies. We first compare the strategies with rebalancing between two asset classes: equity (Russell 1000) as the risky asset and bonds (10Y US government bonds) as...

December 11, 2021
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03Dec

Socially responsible investing

By Charles Stanley Direct The human impact on the environment means changes to the way society and industry operates are necessary, while societal problems such as poverty and inequality need to be tackled. Choosing investments that take account of these issues is what we call “investing with conscience”, or socially responsible investing. Get the book here 647 views

December 3, 2021
Books, Investment, Reports, Sustainability, ,
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November 2021
19Nov

Asset Allocation: Glide Path Design for Target Date Retirement Funds

By Thomas Present, Sharon Persyn In this thesis, we discuss and compare target date retirement fund strategies that have been used in recent literature. These strategies include the 100% equity, glide path, maximum drawdown, risk budget and target return strategy. We conduct sensitivity analyses in order to obtain optimal parameters for the different strategies. We first compare the strategies with rebalancing between two asset classes: equity (Russell 1000) as the risky asset and bonds (10Y US government bonds) as the...

November 19, 2021
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13Nov

Quantifying the Impact of Impact Investing

By Andrew W., Ruixun Zhang We propose a quantitative framework for assessing the financial impact of any form of impact investing, including socially responsible investing (SRI), environmental, social, and governance (ESG) objectives, and other non-financial investment criteria. We derive conditions under which impact investing detracts from, improves on, or is neutral to the performance of traditional mean-variance optimal portfolios, which depends on whether the correlations between the impact factor and unobserved excess returns are negative, positive, or zero, respectively. Using...

November 13, 2021
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13Nov

Fiduciary Duty, Social Conscience, and ESG Investing by a Trustee

By Max M. Schanzenbach, Robert H. Sitkoff This chapter, prepared for the 2021 Annual Heckerling Institute on Estate Planning, examines the law and economics of environmental, social, and governance (ESG) investing by a trustee. Trustees of pensions, charities, and personal trusts invest tens of trillions of dollars of other people’s money subject to a sacred trust known in the law as fiduciary duty. Recently, these trustees have come under increasing pressure to use ESG factors in making investment decisions. ESG investing...

November 13, 2021
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October 2021
15Oct

Global Public Pensions 2020

By OMFIF The inaugural edition of Global Public Pensions, sponsored by Citi and Capital Group, builds on the seven-year track record of OMFIF’s benchmark Global Public Investor annual report and aggregates the portfolios of 100 leading global public pension funds. In total, global public pensions have more than $17tn of assets under management – more than twice as much as sovereign wealth funds, according to OMFIF research. This new report captures 77% of those investable assets. The research reveals that: Public pensions are...

October 15, 2021
Books, Investment, Pension Management,
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15Oct

Pensions and ESG: An Institutional and Historical Perspective

By P. Brett Hammond & Amy O'Brien Sustainable investing is growing into its moment. Funded pensions, which were among the first institutions to respond to sustainability concerns, are showing renewed interest in better ways to reflect responsible investing objectives, along with regulators, asset managers and shareholder groups. Looking back, the principal elements of sustainability—environmental, social and governance (ESG)—all have different origins and took different pathways. Looking across, sustainable investing developed differently depending on region and country. Viewing it today, we...

October 15, 2021
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