December 2020

Here are the top news, stories, observations and other interesting things that we hear about in the market, with relevance for selection teams and sustainable investing.

#1 GFS has launched Sustainable Fixed Income Leaders 

As part of our systematic process to identify and follow the leading asset managers within ESG investing we have expanded our ESG Leaders page to also include Fixed Income. On the page, you will be able to find white papers, strategies, performance tables and information about the asset management firms presented. You will also be able to find more managers via the GFS database. The leaders are, e.g. Allianz GI, Aristotle CP, J. Safra Sarasin, Calvert, Federated Hermes, Invesco, LGT, Ninety One, NN IP, Robeco and Union Investment.

The Fixed Income page can be found here (source: Global Fund Search)

#2 Europe ‘turns a corner’ on Sustainable Investment as 45% of Assets Employ ESG Strategies

A new report by the European Fund and Asset Management Association (EFAMA) has analyzed the ESG investment market across Europe and found that as much as 45% of total assets under management in Europe at the end of 2019 were invested in some sort of ESG selection strategy.

According to the paper, published in collaboration with EFAMA’s member associations and strategy consultants at INDEFI, a total of €10.7trn worth of assets take some sort of ESG consideration into account, with strategies broadly divided into two types: exclusion, or systematic integration of ESG risks and opportunities.

Read the full article here (source: Investment Week)

#3 NordSIP Insights – Impact Investing Handbook

In 2020, impact opportunities are easier to find and more accessible than ever for asset owners. The definitions are clearer, the goals are tangible, and the financial performance delivers on target. Impact has earned its space in institutional allocations.

In this edition of NordSIP Insights, they talked to ten experts, from asset owner to asset manager, from Sweden, Denmark, Finland and beyond to understand what impact in practice means.

The Handbook can be found here (source: NordSIP)

#4 ESG factors on the rise for asset owners, managers – Callan 2020 survey

Institutional investors continue to incorporate ESG factors into investment decisions, and many not yet doing so are considering it, according to Callan’s eighth annual ESG survey.

As with last year’s survey, Callan found that 42% of institutional investors incorporate ESG factors into investment decisions, up from the 22% result from the first survey in 2013. The 2020 survey also registered the highest rate of respondents, 30%, who are not yet incorporating ESG factors but are considering it, triple the rate from 2019.

The full article can be found here (source: Pensions & Investments)

#5 Commentary: Investors beware of ESG fund ratings

If you were to build an investment portfolio with sustainability as one of your main objectives, which of the following two companies would you rather invest in: Tomra, a Norwegian maker of machines enabling the collection of plastic and glass bottles so that they can be recycled, or Altria, an American multinational making tobacco and nicotine-based products? If you follow one of the leading ESG research providers, you would rather invest in Altria since it gets a better ESG rating than Tomra. Put differently, a fund holding 2% in Altria shares would be deemed more sustainable than if the fund held 2% in Tomra shares.

ESG fund ratings are becoming more and more popular, with several of the leading ESG data providers have launched their own ratings. However, are investors adequately scrutinizing the methodology and the data on which these ratings are based?

The full article can be found here (source: Pensions & Investments)