Financial Impact of ESG, Repurposed Funds, and Data
Here are 5 ESG insights you might have missed this week:
Determining the Financial Impact of ESG Investing-
Uncovering the relationship between ESG and financial performance through meta-analysis of 1,000+ studies.
From the NYU Stern Center for Sustainable Business, an examination of the relationship between ESG and financial performance in more than 1,000 research papers from 2015 – 2020.
Key takeaways: improved financial performance due to ESG becomes more noticeable over longer time horizons; ESG integration as an investment strategy performs better than negative screening approaches; ESG investing provides downside protection, especially during a social or economic crisis; Sustainability initiatives at corporations appear to drive better financial performance due to mediating factors such as improved risk management and more innovation; Studies indicate that managing for a low carbon future improves financial performance; ESG disclosure on its own does not drive financial performance.
ESG Demand Prompts more than 250 European Funds to Change Track-
Repurposing helped push European sustainable AUM to €1.1tn by the end of 2020.
In addition to the repurposed vehicles there were 505 new ESG fund launches in Europe over the year.
Morningstar data also show that 87 per cent of the 253 repurposed funds, which claimed to have added ESG criteria to their investment objectives and/or policies, also rebranded themselves, adding terms such as “sustainable”, “ESG”, “green”, or “socially responsible investment” to their fund title.
These are the Biggest Trends in Clean Tech in 2021, Investors say-
With the many tailwinds propelling clean tech, Fortune asked climate investors what predictions they have for the space this year—including the hottest areas to invest in and the impact of accelerating corporate maneuvers to go green.
Climate goes full-on corporate. There has long been pressure on companies—from policymakers, investors, consumers, and many others—to adopt ESG and net-zero goals. But in the year ahead, climate investors expect to see a climbing number of companies committing to do their part.
The hot list: Hydrogen, mobility, agriculture. As climate investors will tell you, there’s now a cornucopia of areas where companies are working to improve the planet. As many of these burgeoning industries gain traction, investors highlight a few hot sectors that should only get bigger in the coming years.
‘Green,’ but not inexperienced. A common thread among many of the conversations Fortune had with venture capitalists and strategists: Investors are seeing droves of entrepreneurs (and, often, very experienced ones) continuing to flood into the climate space.
The Top 6 Barriers to Better ESG Data (and What To Do About Them)-
The opinion of a 30+ year veteran of the sustainability space and his take on the data crisis that has been building for decades and will come to a head in 2021.
Typically, companies collect the relevant data only once per year, often on spreadsheets, to update their corporate responsibility story. This information is not adequate for investment-grade decisions, nor is it all that helpful for developing corporate strategy.
Challenges: Sustainability is not just an investment, immaturity of accounting, inconsistent standards and lack of assurance, lack of regulation – for now, lack of comparability, lack of technology.
S&P Global Provides Free Access to Company ESG Scores on New Webpage-
Access to ESG scores is quickly becoming a key transparency issue for investors. S&P Global’s announcement follows the recent launch by Refinitiv of free access to its own company ESG scores.
Leading credit ratings, benchmarks and analytics provider S&P Global announced today a significant milestone in transparency, with the launch of publicly available access to S&P Global ESG Scores on 9,200 companies. The scores are available on a new webpage rolled out by the company, highlighting S&P Global’s full suite ESG solutions.
One more thing: If you are into programming- a public Python notebook showing how to obtain and exhibit company ESG scores from Sustainalytics via Yahoo! Finance.
Find the notebook here- https://deepnote.com/project/c63fc463-f97c-45c6-9623-3e74de55793d#%2Fnotebook.ipynb
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