Posted in: Best of, Value Drivers, Economics, Capital Investments, Future States, Performance Measurement and Evaluation, Philosophy, Portfolio Management, Risk Management, Standards, Ethics and Regulations (SER)
Tick Entrepreneurial Investor’n our tenth anniversary, we have compiled retrospectives of our coverage of the most critical topics in finance and investing over the past decade.
The last 10 years have seen a sharp acceleration in the trend toward sustainability in investment management and the adoption of environmental, social and governance (ESG) factors in financial analysis.
Since its launch in 2011, Entrepreneurial Investor has followed this trend and provided investment professionals with critical insight into the developments that shape investment sustainability.
ESG investing has been around in one form or another for much of the past 75 years.however, only in the last decade has it reached a critical mass.
This development reflects a confluence of factors. Chief among these is increased demand from end-investors, including institutional asset owners and retail investors, for investment products and solutions that take ESG risks and opportunities into account. Investors have also expressed a desire for investments that align with certain environmental or social objectives, so-called non-profit objectives. Governments and regulators have also put pressure on the investment industry to contribute to broader sustainability-oriented policy goals.
Together, these factors have led to rapid growth in the development of ESG-related financial products. The following chart of Generation investment management Sustainability Trends Report 2021 illustrates this pattern:
Trends in Sustainability-Related Finance, 2015–2020
ESG coverage in Entrepreneurial Investor largely reflects these developments. From NO’Launching in the fall of 2011, a total of 220 ESG-related articles have been published, three-quarters of them since 2016. These publications address all kinds of ESG issues, including accounting and disclosure standards, the debate on fiduciary duty, the relationship between ESG and return on investment, thematic investing, water quality and human rights issues, gender responsive investing and many more.
ESG-focused articles from Entrepreneurial InvestorBy year
What follows is a handpicked selection of the most pertinent insights and thought-provoking commentary on all things ESG during this period. We showcase key sustainability issues through the perspectives of ESG advocates and critics. The collection offers a fascinating window into the ESG debate and orients readers to the emerging sustainability trend and its implications for the future of investing.
A framework to drive ESG financial discipline
Kevin Prall, CFA, outlines a structural foundation for analyzing how ESG affects the value creation of intangible assets and discusses how a focus on intangible value creation can bring more financial discipline to ESG investing.
ESG issues: global trends and transitions
Aline Reichenberg Gustafsson, CFA, and Barbara Stewart, CFA, discuss sustainability and the growing importance of women in the investment ecosystem, with an emphasis on the Nordic perspective.
The ESG performance paradox
Jordan N. Boslego, CFA, says that without strong fiduciary standards, ESG can become an excuse for fund managers to underperform and charge higher fees.
Thematic inversion: thematically incorrect?
Nicolas Rabener examines the merits of thematic investing and how its performance compares to established benchmarks. He concludes that, “ESG and similar topics are forms of investment based on personal preferences. They may have a cost, but they achieve some non-financial goals.”
The ESG debate heats up: four more challenges
What are the main areas of concern in the ESG world? Christopher K. Merker, PhD, CFA, examines the challenges around standards, greenwashing in investment products, and the urgency of climate change.
ESG Investing: Can You Have Your Cake and Eat It Too?
Do companies with high ESG ratings outperform their lower rated counterparts? Gautam Dhingra, PhD, CFA, and Christopher J. Olson, CFA, share their analysis.
ESG investing: too good to be true?
The notion that companies that care about the environment, take care of their employees and exhibit good governance outperform is probably a mirage, says Nicolas Rabener.
Beyond carbon: water risks and sustainable investment
The water crisis in Cape Town, South Africa, demonstrates that carbon emissions and climate change are not the only threats to sustainability, says Monika Freyman, CFA. Concerns about water are already affecting investors’ bottom lines, as well as future risks to their income.
Human rights issues and your portfolio: risks and opportunities
What are the risks and opportunities associated with the integration or lack of integration of human rights issues into asset allocation considerations? Anjali Pradhan, CFA, explores the issue.
Sustainable investment and fiduciary responsibility: conflict or confluence?
Usman Hayat, CFA, interviews David Blood, co-founder of Generation Investment Management, who discusses the sustainable investing trend and discusses why sustainability is an integral part of fiduciary duty.
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All messages are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
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