- Advertisement -
- Advertisement -

ESG/SRI gives Edge to Asset Managers, Moody’s finds

- Advertisement -

 

Stockholm (HedgeNordic) – According to a new report from Moody’s Investors Service, global AUM related to firms that are or have become signatories to the UNPRI (UN Principles for Responsible Investment) has risen 195% in 6 years, from USD 21 trillion to USD 62 trillion in April 2016.

The report, “Asset Managers  – Global: Sustainable Investing Strategies Give Active Managers A Means To Stand Out,” finds that investor expectations and regulations are driving demand for sustainable investing, and that several asset managers, such as BlackRock and Amundi, have obtained an edge as early movers on the issue.

Sustainable investment strategies range from exclusionary practices in some portfolios, to the application of social considerations to shareholder advocacy and the integration of ESG (Economic, Social and Corporate Governance) objectives into investment decisions with the aim of generating long-term competitive financial returns while simultaneously achieving a positive social impact.

“Integrating ESG criteria into investment decisions should limit risks within portfolios and contribute to lower volatility and better performance in the long run. The effectiveness of these strategies however will have to manifest through the cycle, as well as across teams and strategies,” says Marina Cremonese, a Vice President at Moody’s.

Sustainable investing strategies will likely continue to grow as demand rises, driven by large institutional investors such as pension funds, foundations and endowments, the report finds. But high net worth and retail investors are also playing an increasing role in the growth of sustainable investing. For example, European funds subscribing to ESG/SRI have almost doubled in 5 years, from EUR 136b to EUR 75b.

The report also finds that changing attitudes are being boosted by the millennial generation, which increasingly demands investment solutions that also have a positive social and environmental impact, while initiatives like the UNPRI and Ceres are ensuring that investors are becoming more attuned to ESG issues.

The Moody’s report also notes some of the obstacles to making sustainable investing strategies work, such as insufficient supplies of investible products, uncertain performance expectations, evolving disclosure regimes and limited ESG data. Finding high quality ESG data is a challenge, for instance, given the lack of universally accepted ESG definitions and standard reporting guidelines.

Picture: (c) shutterstock_Hunor-Focze

 

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Glenn Leaper, PhD
Glenn Leaper, PhD
Glenn W. Leaper, Associate Editor and Political Risk Analyst with Nordic Business Media AB, completed his Ph.D. in Politics and Critical Theory from Royal Holloway, University of London in 2015. He is involved with a number of initiatives, including political research, communications consulting (speechwriting), journalism and writing his post-doctoral book. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in English and a BA in International Relations.

Latest Articles

Impega: “Small but Agile Version of NBIM”

Stockholm (HedgeNordic) – Norges Bank Investment Management (NBIM), responsible for managing the Norwegian Government Pension Fund Global, has cultivated a wealth of talent over...

CABA Launches ‘Flex2’ for Another Ride on the Spread Curve

Stockholm (HedgeNordic) – In December 2022, Danish boutique CABA Capital launched a closed-end fund with a three-year lifespan to capture risk premiums in Scandinavian...

Truepenny One Step Closer to Launch

Stockholm (HedgeNordic) – Truepenny Capital Management has received authorization as an investment firm and obtained license as a portfolio manager from the Swedish financial...

Rhenman Embracing Change Amid an Ever-Changing Healthcare Sector

Stockholm (HedgeNordic) – The largest equity hedge fund in the Nordics with assets under management just shy of $1 billion, the Rhenman healthcare fund,...

Inside Ilmarinen’s Approach to Hedge Fund Allocation

Stockholm (HedgeNordic) – Ilmarinen, in a tight race with Varma as Finland’s largest earnings-related pension insurance company, has emerged as a noteworthy investor in...

Nordic Hedge Fund Industry Report 2024

Stockholm (HedgeNordic) – HedgeNordic’s Nordic Hedge Fund Industry Report kicks off with an analysis of the industry’s performance across different asset size ranges. This...

Allocator Interviews

Latest Articles

In-Depth: Emerging Markets

Voices

Request for Proposal

- Advertisement -