ESG strategies – Special report 2021

Continued interest in environmental, social and governance (ESG) issues is driving up global sustainable fund assets, with inflows peaking at their highest-ever levels in the first quarter of 2021. While ESG investments still represent only a small proportion of overall fund assets, by 2025 ESG funds are expected to outstrip traditional funds.

However, evaluating ESG investments is fraught with difficulty, from defining ESG criteria to understanding the true societal and environmental impact of individual assets. The lack or poor quality of underlying data in corporate disclosures is a serious impediment to measuring the true sustainability of companies. And, although there are some commonly agreed upon ESG criteria in the industry, not all ESG metrics are standardised, while some qualitative ESG criteria are not easily quantifiable. So, the way those criteria are weighted by ratings providers or asset managers will vary.

This Risk.net special report comprises a series of articles that reflect on the latest initiatives for consistent standardised global frameworks for measuring ESG, consider the methodologies investors are using to make measurable progress for people and the planet, and discuss some of the challenges around ESG structured products and derivatives.

 

Download the full 2021 ESG strategies special report in PDF format

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Did COP26 deliver?

Jaspreet Duhra, S&P Dow Jones Indices (S&P DJI), explores the opportunities that came out of the 2021 UN Climate Change Conference in Glasgow, and why S&P DJI will continue to produce rules-based indices that align with a 1.5° Celsius scenario

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