Responsible investing: Good with money
The list of reasons to invest responsibly is growing. Building a better society and protecting the planet by funding companies that treat their employees with respect, conserve water and reduce their climate-damaging carbon emissions is a motivation for many. The growing body of research claiming that these strategies not only reduce risk but investors do not have to sacrific return by adopting them is another attraction. Now there is another benefit. Responsible investing could see savers engage more with their pensions and pay more into their retirement pots. Indeed, a sur- vey by Franklin Templeton found that defined contribution (DC) schemes could receive an additional £1.2bn collectively from members each year if they improve how they integrate responsible investing into their portfolios. This would see annual contributions rise by 20%. The survey also discovered that only around a quarter of members (22%) believe that their DC scheme is aligned with their values. Almost half (45%) would pay more into their workplace pension if it offers more options to invest responsibly. Responsible investing has many names. The latest is ESG and what that means is the subject of much debate. The one fact that is undisputed is member inter- est in using their capital more sustainably. With the popularity of ESG-led investing rising, we sat down with those following such a strategy and their advisers to discover how asset owners are investing responsibly, what returns they are making and if such strategies are limited to equities. Our coverage starts on page 4.
Mark Dunne Editor, portfolio institutional
Contents
P4: Responsible investing roundtable Asset owners, managers and consult- ants give their views on responsible investing.
P22: Impact investing: Exploring the drivers and benefits Aon’s Tim Manuel outlines why inves- tors should consider getting exposure to impact investing.
P24: How to reduce carbon in institutional portfolios Fawzy Salarbux at Candriam discusses one of the biggest issues in ESG investing: reducing the impact of climate change.
P26: How smarter ESG integration can preserve your free lunch LGIM explains why investors need to understand the impact that excluding sectors from ESG strategies has on portfolios.
P28: The link between ESG and performance Robeco’s Masja Zandbergen examines the risk-return profile of ESG strategies.
P30: ESG data: Land of confusion Separating sustainably-focused com- panies from the badly behaved is all the rage, but are investors calling it right? Mark Dunne reports.
November 2019 portfolio institutional roundtable: Responsible investing 3
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