Category: ESG

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The world’s largest investor says a $3.8 trillion market faces growing climate-change risk (Market Insider)

https://markets.businessinsider.com/news/stocks/climate-change-risk-to-38-trillion-municipal-bond-market-blackrock-2019-4-1028123832

Link to report: https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/physical-climate-risks

BlackRock, the world’s largest asset manager, is doubling down on its view that investors in the US don’t yet fully appreciate the just how disastrous an economic impact climate change could have at a time when environmental, social, and corporate governance investing is garnering mainstream attention.

“Climate-related risks already threaten portfolios today, and are set to grow, we find,” strategists at the BlackRock Investment Institute wrote in a report this week, homing in on threats the massive US municipal bond market could face as the planet warms.

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Advisors on ESG Investing: We Need Better Data (ThinkAdvisor)

https://www.thinkadvisor.com/2019/05/20/why-advisors-shy-away-from-esg-investing/

Link to Natixis Survey: https://www.im.natixis.com/us/resources/esg-investing-survey-2019

Investors are more interested than ever in how publicly traded companies handle environmental, social and governance issues, but many say they lack the information to make ESG investment decisions and their advisors often offer little help.

Those are some of the major findings of a new Natixis survey on ESG investment issues, which essentially combines the results of four previous global surveys of close to 12,500 individual investors, financial professionals, institutional investors and professional fund buyers. About 12.5% of those surveyed are from North America, primarily the U.S.

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Global sustainable investments hit over $30 trillion in 2018 (GSIA Report)

http://www.gsi-alliance.org/wp-content/uploads/2019/03/GSIR_Review2018.3.28.pdf

Globally, sustainable investing assets in the five major markets stood at $30.7 trillion at the start of 2018, a 34percent increase in two years. In all the regions except Europe, sustainable investing’s market share has also grown. Responsible investment now commands a sizable share of professionally managed assets in each region, ranging from 18 percent in Japan to 63 percent in Australia and New Zealand. Clearly, sustainable investing constitutes amajor force across global financial markets.

From 2016 to 2018, the fastest growing region has been Japan, followed by Australia/New Zealand and Canada. These were also the three fastest growing regions in the previous two-year period. The largest three regions— based on the value of their sustainable investing assets—were Europe, the United States and Japan.

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Happy Earth Week! Sustainable Investing Goes Mainstream (Oppenheimer)

https://www.oppenheimerfunds.com/advisors/article/sustainable-investing-goes-mainstream?CMPID=EAMZZ1900101971&SID=100&AN=OPPNEW_20190422&HB=00000000000021884526&om_rid=AAAAAA&om_mid=2285961&heartbeat_id=00000000000021884526&itx[email]=fcc60a77dcf692cfed07ed5f940f9f8532ce8b71f28ce5b1db27bbb8653f1263@idio&BID=26344032&CID=ofiDM14451&OPT1=Rep&OPT2=IDIO%20TEST&OPT3=Y

In a few short decades, sustainable investing has grown from a niche corner of the financial world to a phenomenon large enough that the primary challenge for investors may come in understanding its true scope, the changes it represents for businesses and financial markets, and how to position their personal finances for the future.

By early 2018, funds guided by environmental, social and governance (ESG) issues totaled $98 billion in the United States, a 58% increase over the previous year, according to a 2018 Morningstar report.

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IRS Releases New Round of Regs for Opportunity Zone Funds (ThinkAdvisor)

https://www.thinkadvisor.com/2019/04/17/irs-releases-new-round-of-regs-for-opportunity-zone-funds/

The Treasury Department has released a new round of proposed regulations governing opportunity zone funds that answers several key questions that have kept potential investors and fund operators on the sidelines.

The zones in which the funds invest are either in or adjacent to depressed communities, and there are over 8,700 spread throughout the U.S. To date, most of the early opportunity zone funds are focused on real estate developments, but the tax benefit is also available for other types of businesses opportunity in the zone.

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Six Trends in College and University Endowments (CFA Enterprising Investor)

https://blogs.cfainstitute.org/investor/2019/04/03/six-trends-in-college-and-university-endowments/

What trends are influencing endowment investing in today’s market?

Among larger institutions, college endowments have been at the forefront of SRI and ESG investing…more than one in four colleges engages in some form of SRI. This could take the form of traditional negative screens or restrictions among faith-based organizations, ESG, shareholder activism, or impact investing. Parsing the data by assets, we find nearly 60% of these institutions apply some form of ESG criteria. 

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Global Sustainable Investments Rise 34 Percent to $30.7 Trillion (Bloomberg)

https://www.bloomberg.com/amp/news/articles/2019-04-01/global-sustainable-investments-rise-34-percent-to-30-7-trillion

Global socially responsible investments grew by 34 percent to $30.7 trillion over the past two years, lifted by Japanese pension funds, retail investors everywhere and broad, growing concern about climate change.

Money managers around the globe said clients were increasingly asking for sustainable strategies and that climate change became a leading issue for investors this year. Retail investors bought up more ethical funds, according to the report, and now account for about 25 percent of assets, up from 20 percent in 2016.

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ESG investing in 401(k)s faces fiduciary, regulatory questions (BenefitsPro)

https://www.benefitspro.com/2019/03/19/esg-investing-in-401ks-faces-fiduciary-regulatory-questions/

Sustainable investing is on a tear.

According to Morningstar research, sustainable investment funds, which the research firms defines as those that use environmental, social and corporate governances (ESG) criteria as measurements for scoring the societal impact of investing in a public company, saw record flows of $5.5 billion in 2018.

Last year marked the third consecutive year of record flows to ESG-premised mutual funds, which increased 50% to 351 offerings in 2018.

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Painstaking Progress for Funds That Aim to Do Good (WSJ)

https://www.wsj.com/articles/painstaking-progress-for-funds-that-aim-to-do-good-11553166000

DWS Group Inc., the asset-management business of Deutsche Bank AG , recently raised $843 million in a single day for a new fund that tries to invest in the best corporate citizens in the U.S.

It was one of the most successful exchange-traded-fund debuts of all time, and especially noteworthy in the slow-growing corner of the market devoted to responsible investing.

For years, asset managers have been trumpeting a new dawn for strategies that deliver competitive returns along with a clear conscience. In the past year alone, firms including Vanguard Group, Goldman Sachs Group Inc. and BlackRock Inc.’s iShares have introduced more than a dozen ETFs that use environmental, social and governance scores to pick stocks and bonds.

But investors have been slow to buy into so-called ESG funds. The triumphant inaugural run of DWS Group’s Xtrackers MSCI USA ESG Leaders Equity ETF may signal a step change in investor participation.