Does ESG Actually Outperform?

The latest Responsible Investing news and insights

The Responsible Investor aims to keep finance and investments professionals abreast of developments in sustainable finance and the economics of climate change.

ESG does not generate outperformance, Scientific Beta warns

The idea ESG is a factor that can deliver outperformance much like value or momentum has been shunned in recent research conducted by index provider Scientific Beta.

The white paper, entitled ‘Honey, I Shrunk the ESG Alpha’: Risk-Adjusting ESG Portfolio Returns, argued there is no solid evidence to support claims that ESG can deliver outperformance. (ETF Stream)

Northern Trust Asset Management Hires Julie Moret to Lead Sustainable Investing and Stewardship

Northern Trust Asset Management (NTAM), one of the world’s leading investment managers, has hired Julie Moret as global head of sustainable investing and stewardship to build on its legacy of creating long-term investment value for its clients through management of environmental, social and governance risks, effective engagement and proxy voting. In this newly created role, Moret will oversee the firm’s sustainable investing and global engagement policies, foster research and product development agendas, advance portfolio integration across asset classes and contribute NTAM’s perspectives to external industry associations.

A Quick Guide to Socially Conscious Investing

Socially conscious investing is booming. According to the latest biennial report from the United States Forum for Sustainable and Responsible Investment (US SIF), total U.S.-domiciled assets under management employing sustainable investing strategies increased 42 percent over the past two years to $17 trillion in 2020. ESG (environmental, social and governance) investing now makes up 33 percent of total U.S. assets under management. (Worth)

Germany unveils plan to become a leading hub for sustainable finance

"The federal government wants to develop Germany into a leading location for sustainable finance," states the plan, which is aligned with the United Nations' Sustainable Development Goals.

The plan aims to support the European Union becoming carbon neutral by 2050 - a target the European Commission estimates will require 350 billion euros to be invested annually.

The plan also responds to investors demanding more companies complying with environmental, social and governance (ESG) criteria. (World Economic Forum)

Growing Influence of ESG Increasingly Evident in Market Prices

The growing influence of ESG is increasingly evident in financial markets, from rising premiums for green assets over their conventional counterparts to higher carbon prices over several emission trading schemes globally, Fitch Ratings says in a new report.

The yield spread between the German government’s twinned green and conventional bond issuance show a rising premium for green assets, sometimes called the “greenium”. This is happening at the same time as ESG bond issuances hit a record pace in 1Q20, already matching issuance for 2019. This suggests demand for green assets is more than keeping up with supply. (Fitch Ratings)