Editorial
Mark Dunne Editor
m.dunne@portfolio-institutional.co.uk
ESG: 2020 vision
ESG is changing our lives. From how we carry our groceries home to the size of the can of coke we drink to how modern cars are powered and how we interact with our colleagues. Such changes are the result of a growing public will to build a sustainable future and respect human rights.
And where the consumer goes, the commercial world follows. This is making policy announcements from companies on reducing climate-damaging gas emissions, cutting plas- tic waste, conserving water, treating employees fairly and making a positive impact on com- munities more and more common. Indeed, the growing popularity of environmental, social and governance (ESG) factors increasingly shapes how investors are assessing an asset by considering its non-financial aspects rather than just asking: “How much money will it make?” With so much written about what the equity and bond markets as well as alternative asset classes, such as property, could hold in store for investors in 2020, we thought it would be more beneficial to find out what issues could make the ESG headlines in the year ahead. For our first cover story of the year we spoke to those working with institutional investors to find out what themes they believe will influence their clients’ decisions in the next 12 months. Climate change will continue to dominate discussions in this space, but the conversation will be different. It will change from why address it, to how to implement it. A sign, perhaps, that the industry’s response to the issue is maturing.
Another sign is that industries other than oil and gas will be assessed on their environmen- tal impact as analysis moves more and more beyond target companies to take a closer look at their suppliers.
A desire to make a social impact could also be high on the agenda, while data is set to be “the battle ground of ESG”, according to a consultant we spoke to. This is not only about generating better data to measure an asset’s non-financial performance, but also to spot future trends. Our coverage on ESG’s big themes in 2020 starts on page 24. We also spoke with asset owners to ask not for their predictions for the year ahead, but what they would most like to see happen in 2020, whether it be in the markets, the economy, pol- itics or regulation. You can read what is at the top of our panel’s wish lists from page 28. We hope this issue gives you something to think about and we will be back in early February, where we will be looking a little different.
Issue 89 | December-January 2020 | portfolio institutional | 3
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