ESG

Environmental, social and governance (ESG) funds should forget fiduciary duty, dump ratings and adopt extreme exclusions in a radical revamp of the investment overlay proposed in a US academic paper.

The “well-intentioned and genuine” claims super funds made about their sustainable bona fides have landed them in the regulators’ crosshairs. They’re going to have to figure out how to actually follow through on them if they want to win the battle for members’ retirement savings.

The bias towards investing in domestic securities and the complexity of the local benchmarks mean the impact investing conversation is “very advanced” Down Under, according to global asset manager Ninety One.

Having “skin in the game” is usually a boon for performance and client alignment. But when managers put their money where their mouth is, they don’t invest it sustainably according to a Swiss report.

ESG is the “emptiest” idea, according to Aswath Damodaran, while AI will morph into higher costs for companies overall with no competitive advantage in a world where the technology is ubiquitous.

Boutique fund manager Alphinity has struck a partnership with the CSIRO to develop a new framework to assess responsible artificial intelligence practices and ESG considerations.

The global energy system is changing at a rapid pace but it’s too early to pick winners, according to Calvert. And despite a tough 2022, true ESG will prevail.

Australian institutional investors are plotting increased allocations to alternatives and rethinking geopolitical risk, according to Nuveen.

Your Future Your Super makes ESG investing a fraught proposition for super funds. But decarbonising benchmarks doesn’t have to generate (that much) tracking error – if you do it right.

Transparency should be the bedrock of sustainable finance.