ESG mutual funds: All set for higher inflows and greater investor interest
The COVID-19 pandemic has given a big push to the ESG theme. There has been a shift in investor values and sentiments towards socially responsible investing (SRI) and impact investing. In addition, there has been a greater focus on climate change and its impact on our lives worldwide, leading to the theme of “conscious investing” gaining traction in 2021.
Data from the global fund-flow tracker, EPFR, revealed that equity funds that offered SRI or ESG investing saw record inflows of $168.74 billion in 2020, a huge jump from the $63.35 billion seen in 2019. In addition, a BlackRock survey in December 2020, conducted on 425 investors across 27 countries representing an estimated $25 trillion in assets under management (AUM), revealed that investors plan to double their ESG investments over the next five years. This would take the ESG AUM from 18 percent in 2020 to 37 percent by 2025.Read more
How do we see ESG influencing markets in 2022 and the years ahead? A layman’s
Environmental and social issues acquired a lot of traction in recent years. Several corporate catastrophes affecting customers, the environment, and society at large such as Assam gas and oil leak, data privacy concerns at Facebook, the death of #GeorgeFloyd in the USA, and the #MeToo movement sparked calls to action for more sustainable corporate practices. In a world already aggrieved by pandemic and subsequent disruptions, ESG (environmental, social, and governance) will shape the future in a variety of ways and ESG-related activities would become the standard.
While ESG initiatives have been around since the 1950s, it wasn’t until the 2010s that they became a credo for most businesses. At the start of the decade, market players welcomed corporate governance reform by adopting related laws, codes of best practice, and responsible investment. If the 2010s debate and policy development established the basis for ESG corporate practices, the 2020s will focus on putting ESG into practice.Read more
L&T’s ESG thrust aims to achieve carbon, water neutrality in less than two decades
The company aims to achieve Carbon Neutrality by 2040, ahead of the Paris Agreement deadline of 2050. L&T said that it is incorporating climate-related policies, including the NAPCC, TCFD and other similar guidelines into its business. More than 10 percent of the total electricity consumed by the company comes from renewable sources. Cumulatively, the company has saved 128 million KWh of energy since 2008 which is equivalent to powering 60,000 households for one year.Read more
Asian Asset Owners to Accelerate ESG Ambitions
As regulations around disclosure such as the Task Force on Climate-Related Financial Disclosures (TCFD) become mandatory and more tangible, asset owners will likely also expect their asset managers to report on climate risk metrics. However, the most popular motivator for including ESG beliefs and practices is to improve the resilience of the portfolio,” said Jayne Bok, Head of Investments Asia, Willis Towers Watson.
“More sophisticated investors are leading the charge on allocation through strategies that can be described as thematic or impact investing. These include strategies that go beyond integrating ESG into the investment decision process, but actively invest into positive ESG impact companies, such as those focused on climate solutionsRead more