ESG

Shame-based investment strategies yoked to simplistic environmental, social and governance (ESG) scoring systems have come under fire in a new report from UK data analytics firm, Util.

If negative screening worked, stocks in the sin bin should have lower firm valuations, higher future stock returns, and delist more often. They don’t.

Performance concerns for sustainable investing have risen to the fore as the Your Future Your Super (YFYS) test shortens investment horizons. The wider return outlook is more challenged too.

Recent market moves won’t be the end of ESG, but it’s as good a time as any to remind investors that there’s more to it than exclusion.

The investment arm of State Street has forecast a bonanza ahead for environmental, social and governance (ESG) investment service providers as the sector explodes into the mainstream. In a new report on the phenomenon, State Street Global Advisors says the ESG “solutions space” is likely to expand rapidly in five key areas as investment managers,…

While Australia’s biggest asset owners are “extremely sophisticated” on ESG, the shackles of the idiosyncratic Your Future Your Super (YFYS) benchmarks are still holding them back on portfolio decarbonisation. A micro-debate occasionally rages in the Australian financial landscape about whether we’re behind or ahead of the ESG curve. Certainly we’ve lagged Europe in terms of…

Your Future, Your Super (YFYS) is the ultimate blunt instrument, and super will be glad to see it tweaked. But perhaps the bigger debate is around the future use of another blunt instrument: exclusion. If recent market moves are any determinant, it’s the exclusionary funds that will suffer most under the YFYS performance test, by…

Everybody wants certainty, but it’s the one thing in short supply in markets today. “In investing, the most important thing to recognize is that you’re probably wrong in anything which you believe,” Mark Barker, head of international at GQG Partners, told the Inside Network’s Equities and Growth Symposium. “Have a view, but hold your view…

Active management will be increasingly important for defined contribution (DC) retirement savings schemes as value-for-fees, expected lower future returns and sustainable investment preferences come to the fore, according to a new MFS white paper. The analysis says the rising exposure to index investments in DC schemes has been built on at least three “misconceptions about…

The recent surge in demand for fossil fuels doesn’t mean the green energy revolution is dead. But investors need to proceed with caution lest they lose their mandate to manage the transition. There are two schools of thought on what Russia’s invasion of Ukraine means for fossil fuel production and consumption. Either it will hasten…