Sponsored article
Sustainable investing in multi-asset and equity strategies
Maria Municchi, a fund manager who is part of M&G Investments’ multi asset and positive impact teams
Investors increasingly want to embrace and demonstrate greater responsibil- ity in their investment strategies. Whether it’s large pension schemes looking to deliver retirement incomes or individuals investing for their future, there is an increasing attraction to approaches that target attractive returns while investing responsibly or sustainably.
Responsible investing comes in different forms: for example, ethical invest- ing, ESG (environmental, social and governance) considerations or impact investment. It is important to understand how they differ and how each can
be captured in the main asset classes, such as equities and bonds.
Ethical approaches usually centre on company or sector exclusions. They are based on an investor’s underlying beliefs and might range from nuclear power to animal welfare.
Applying ESG in different ways ESG investing covers a range of activities, from applying negative or positive screens to filtering invest- ments to fundamental analysis and engaging with companies. Screens may focus on whether compa- nies meet certain qualifying characteristics or subscribe to particular third-party principles, or on how their ESG standards compare to sector peers.
Fundamental analysis in ESG may relate to how a company operates, how it uses resources, treats its workers or customers, or how transparent it is in its reporting and dealings. Engagement takes that a stage further and works with companies to encourage improvement and positive action.
The aim is to identify companies operating more sustainably and can adapt to a changing world where incorporating ESG behaviours is business as usual.
Proactive approach of positive impact More recently, sustainable investing has been developed to give consideration to the positive impact an investment is expected to make. Impact investing typically combines two appealing objectives into a single strategy: attractive financial returns and measurable positive societal impact. Impact strategies were once confined to institutional or other wealthy investors through private investment, but by investing via listed equities, impact has become available to smaller investors.
Our positive impact team assesses investment candidates using a three-factor approach known as iii-analysis. The quality and viability of each potential investment is scrutinised alongside the declared impactful intentions (and practices) of the business and the materiality of the impact its activities have in a number of social and environmental categories, mapped against the UN Sustainable Development Goals (SDGs).
22 May–June 2019 portfolio institutional roundtable: ESG
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32
