January 2022
25Jan

Aviva Investors CEO warns directors over sustainability targets

The chief executive of Aviva Investors has warned it will take action against company directors if they do not meet its expectations on sustainability improvements. In a letter sent to 1,500 companies in which Aviva Investors is invested, Mark Versey said the fund house will focus on their performances against four themes: biodiversity, human rights, climate and executive pay. He said the company would hold both boards and individual directors accountable at companies "where the pace of change on climate, biodiversity...

January 25, 2022
News, Slider, ,
Read more...
21Jan

The Effects of Credible Voluntary Disclosures: Institutional Investor Engagement and Investees’ ESG Performances

By Massimiliano Bonacchi, April Klein, Sara Longo & Giovanni Strampelli We study the effectiveness of institutional investor engagement on the ESG performance of a sample of UK firms listed in the FTSE 350 Index. To measure the quality of engagement, we exploit the introduction of the tiering classification system by the Financial Reporting Council (FRC) in 2016 for signatories’ reporting under the UK Stewardship Code. Using an entropy matched difference-in-differences research design, we show that the introduction of the tiering...

January 21, 2022
Articles, Investment,
Read more...
21Jan

Canada. ESG challenges: talent shortage and lack of consistent standards

Just as awareness and support is accelerating for environmental, social, governance (ESG) investing, with retirement systems worldwide such as the Canadian pension system attracting attention for their strategies, an issue has arisen – a shortage of financial professionals with sustainable finance skills. Pension funds and investment managers are among the financial services organizations affected by the talent shortage, says a recent report from Toronto Finance International (TFI) and Deloitte. But banks and insurance companies are affected as well. How soon will...

January 21, 2022
News, Slider, , ,
Read more...
20Jan

Why Sustainable Strategies Outperformed in 2021

It paid for investors to be sustainable in 2021, even as energy companies were among the stock market’s best performers. Companies that scored the strongest on environmental, social, and governance metrics saw some of the highest returns in 2021 with help from stocks such as Nvidia (NVDA), Microsoft (MSFT), and TSLA (TSLA). The Morningstar U.S. Sustainability Leaders Index--representing the 50 U.S. companies with the best ESG scores as measured by Sustainalytics (a division of Morningstar)--returned 33.3% for the year, beating the...

January 20, 2022
News, Slider, ,
Read more...
19Jan

The elephant in the room: Bringing sustainable investment to Africa

By Fiona Stewart The coronavirus pandemic has renewed interest in sustainable investing strategies that allow investors to both protect the financial value of their assets and contribute to solutions to global problems such as climate change. These investments have become increasingly mainstream, and now account for more than $39 trillion in the five major global markets, a 34 percent increase over two years, according to the latest trends reported by the Global Sustainable Investment Alliance. Read also Ghana. Lack of Pension...

January 19, 2022
News, Op-Ed, Slider, , , ,
Read more...
18Jan

It’s Not ‘Woke’ for Businesses to Think Beyond Profit, BlackRock Chief Says

Laurence D. Fink, the founder and chief executive of the investment giant BlackRock, has become one of the most influential voices in business over the past decade in pushing corporate leaders to think beyond profits, to their social purpose. Read also Canada. ESG challenges: talent shortage and lack of consistent standards Mr. Fink has delivered his words in annual letters that have drawn remarkable attention, but also criticism from all corners: that he is beholden to politically correct antibusiness activists, or...

January 18, 2022
News, Slider, ,
Read more...
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, ,
Read more...
14Jan

UK. FCA’s SDR intent welcomed; greenwashing fears remain

The Financial Conduct Authority's (FCA) proposals on sustainability disclosure requirements (SDR) have been welcomed by industry experts, although concerns remain over the need for one "harmonised" and understandable system for all investment products. The regulator previously launched a discussion paper seeking views on the proposed SDRs for asset managers and FCA-regulated asset owners, which aim to “empower” pension scheme trustees to consider climate-related factors in their decision making. Industry organisations have welcomed the FCA’s intention behind the proposals, with Interactive Investor...

January 14, 2022
News, Slider, , ,
Read more...
Opinion: Do ‘ethical’ pension funds have a private equity problem?
13Jan

Do ‘ethical’ pension funds have a private equity problem?

By Brett Arends The people running public pension plans these days like to boast about their “ethical” investment policies, for example when it comes to the environment or “diversity, equity and inclusion.” Meanwhile they pour billions of dollars into secretive private-equity funds in pursuit of extra profits. Now comes yet more evidence that some of those private-equity managers in turn are using that money for the opposite of ethics. “Private equity ownership leads to an increase of 147% in the percentage of… financial...

January 13, 2022
News, OP Ed, Op-Ed, Slider, ,
Read more...
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,
Read more...