Technology
Tomorrow’s leaders: I
nvestors have always been the key force for asset managers’ adoption of ESG strategy. About 85% of hedge fund managers have estimated that
institutional investors are the biggest drivers of ESG funds, and the percentage of investors implementing ESG rose by 18% from 2019 to 2021. With ever-increasing risks surrounding environment, renewable energy, human rights, business ethics and labour standards – governments, companies, institutional investors and their asset managers are now questioning the extent to which their assets are responsible for the damage that has been caused. They are also exploring what can be done to mitigate these risks in the future, so that they are optimising each asset to its best capacity. Investors and asset managers are smart enough to identify which assets show genuine ESG compatibility and, with the help of the regulators, provide oversight of green funds. To make the most of the funds and fulfil their purpose, asset managers are required to define the overview and context of what ESG means to them when identifying the metrics for their assets’
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Investing in the future
HFTP competition winner Shivam Sharma writes why environmental, social and governance (ESG) mandates hold signifi cance in asset management, while runner-up Ricardo Tellez tackles the fall of the traditional dining experience.
performance. It comes not only from the financial point of view, but the ESG lens can be a solid risk- management tool with non-financial outcomes. The non-financial factors that affect the performance of the asset must be managed well because they tend to be more efficient, aligned with the preferences of the investors and generally less exposed to the risks by various regulators from different domains. Asset managers must work closely with investors to create their own policies and standards. A lack of standardisation risks operational burden on asset managers, thanks to additional due diligence requests and customised reporting for prospective investors. As asset managers begin to set their own ESG policies and/or offer ESG products, managers must consider their overall ESG investment strategy (for example, activist versus passive ownership) and implement policies to support that chosen strategy. Emphasis on ESG investment is picking up globally
and regulatory bodies either already mandate how asset managers meet and disclose ESG objectives, or they are determining how they should bring forth
Hotel Management International /
www.hmi-online.com
Net Vector/
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