Coutts MD: Sustainability is about ‘unpeeling’ investment decision making

Mohammad Jamal Syed, managing director and head of investment management at Coutts & Co, tells Finextra Research of the ‘root and branch uplift’ in the firm’s investment decision making to address ESG goals.Rather than simply creating a series of socially-responsible or impact funds and investments, Coutts decided that all decisions throughout the investment process should be seen through a filter of what is and is not responsible.

ABN Amro to give clients insights on sustainability of investment portfolios

ABN AMRO is to regularly give clients who use its investment advice and asset management services in-depth insight into the sustainability impact of their investments.This will be the next step on the road towards increasingly sustainable investing, the direction taken by the bank several years ago. Clients in these groups will receive reports every quarter on the non-financial impact of their investment portfolios.

ISLA forms three new “broader” steering groups

The International Securities Lending Association (ISLA) has formed three new steering groups to address the regulatory, digital and associated market practice changes the industry is experiencing through the recent pandemic.ISLA runs a variety of working groups for its members, covering all aspects of advocacy, tax, legal, regulation and best practice in order to allow members to discuss challenges, debate issues, conceive ideas and seek solutions. 

Big banks give backing to Singapore Green Finance Centre

The Monetary Authority of Singapore and nine international banks have leant their weight to the establishment of a research institute dedicated to green finance research and talent development.The Singapore Green Finance Centre, run by Imperial College Business School and the Lee Kong Chian School of Business at Singapore Management University (SMU), will pursue research to help develop strategies for policy makers and financial institutions to support Asia’s transition to a low carbon future.

HSBC appointed securities services provider for HK ESG ETF

HSBC has been appointed as the as the full securities service provider by Haitong International Asset Management (HK) Limited for Haitong MSCI China A ESG ETF, the first broad-based environmental, social and governance exchange-traded fund listed on Hong Kong Stock Exchange. 

ESG 2.0: Crowdsourcing standards and mass customization

With net flows into sustainable funds nearly quadrupling in 2019, attracting a record $20.6 billion1, last year was widely heralded as a breakthrough year for Environmental, Social and Governance (ESG) investing. The dramatic growth provided yet more proof of the heightened demand for ESG investment options from institutional and retail investors alike. With the outbreak of the COVID-19 pandemic, ESG focused funds now face their first real test since entering the mainstream.

IBM and The Climate Service to quantify risks to banks from climate change

IBM (NYSE: IBM) and The Climate Service (TCS), a leader in climate risk analytics for investors and businesses, today announced their alliance to work with financial institutions and corporations to better measure and quantify risks associated with climate change.As part of the alliance, the companies are now making the TCS Climanomics® software platform available via Red Hat OpenShift on IBM Cloud.

Sibos 2020: Defining sustainable finance and ESG, beyond climate action and the environment

As wildfires, hurricanes, social and economic unrest and the pandemic play out across the global stage, the final of day of Sibos 2020 focuses on banking for humanity, the impact of ESG and the triple bottom line as a driver for sustainable business.

Renewable energy not as prominent in cryptocurrency mining as previously claimed

The prevalence of renewable energy in cryptocurrency mining is being driven by hydroelectricity, according to a study by the Cambridge Centre for Alternative Finance (CCAF), but APAC’s cheap coal-powered energy is what sets it apart from other regions.The CCAF’s research finds that 76% of ‘hashers’ use renewable energy to power their activities, with hydropower the number one source at 62%. Wind and solar energy meanwhile are used by 17% and 15% respectively.

Morgan Stanley commits to reach net-zero finance emissions by 2050

Morgan Stanley today announced a new commitment to reach net-zero financed emissions by 2050.The Firm joins many of its clients in this strategic goal and is committed to providing financing, expertise and thought leadership to support the transition to a low-carbon world.

Covid Response Boosts Green Metals

Unprecedented stimulus has led some countries to focus on a green recovery with more renewables and lower emission vehicles.Copper and the platinum group metals are used heavily in wind energy and cleaner vehiclesOne policy response to the COVID-19 pandemic has been a determination to use fiscal stimulus to promote a “green” recovery.

ESG on the Buy Side

Briefly describe Harvest Global Investments and outline your role and responsibilities as CIO.Harvest Global Investments is a fully owned subsidiary of Harvest Fund Management, one of the largest asset management companies in China with almost USD 140 billion in secondary market assets under management. As the international arm of the Harvest Group, Harvest Global Investments has been serving as the global gateway for global investors to access to China’s capital markets and the opportunity to participate in its rapid growth since 2008. As the CIO of Harvest Global Investments, I oversee all investment activities conducted by Harvest Global Investments and lead ESG initiatives for the Harvest Group.

European ESG Disclosure Requirements for Asset Managers

by Kirsten Lapham, Michael Singh, Amar Unadkat, John Verwey A new European regime on sustainability-related disclosures in the financial sector will come into force from March 2021, after first being announced in 2018 during the European Commission’s Action Plan on Sustainable Finance. The new rules are drafted to have a wide scope and will impose environmental, social and corporate governance (“ESG”) requirements for a wide range of “financial services participants”, including investment firms and fund managers which will include non-EU fund managers such as US fund managers, that market funds in the European Economic Area (“EEA”) under the national private placement regime (“NPPR”). The new regulatory framework is intended to drive sustainability in an effort to make EU financial markets more sustainable. The two key aspects are the EU Taxonomy Regulation (2018/0178 (COD)) and the Regulation on Disclosures (EU/2019/2088) – (referred to as the “Disclosure Regulation” or the “SFDR”).

Coalition of UK banks launched to standardise carbon accounting

The Partnership for Carbon Accounting Financials (PCAF) is launching a coalition aimed at the promotion of measuring and disclosing carbon emissions in the UK financial services industry.The coalition includes Natwest, Lloyds Banking Group, Investec and Nationwide and is chaired by the international arm of investment manager Federated Hermes.

Climate scenario analysis toolkit for banks launches

Think tank 2° Investing Initiative (2DII) has launched a free, open source climate scenario analysis toolkit for banks.Based on the Paris Agreement Capital Transition Assessment methodology, Pacta for Banks is designed to help users measure the alignment of their corporate lending portfolios with climate scenarios across key sectors and technologies.

New Zealand to make climate risk reporting compulsory for financial institutions

New Zealand is to be the first country in the world to require the financial sector to report on climate risks.The new regime will be on a comply-or-explain basis, based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, which is widely acknowledged as international best practice.

LuxSE introduces a sustainable finance hub

The Luxembourg Stock Exchange (LuxSE) today marked the go-live of the LGX DataHub, a unique, centralised database of structured data on a vast range of sustainable securities.LuxSE launches unique data hub for sustainable finance

Cboe plans to list new S&P 500 ESG Index Options

Exchange operator Cboe Global Markets has confirmed it will list new S&P 500 ESG Index Options in a bid to expand its S&P Dow Jones Indices product offering.The Cboe S&P 500 ESG Index Options, which will be available from September 2021, are designed to help market participants trade, hedge or gain exposure to US equities sustainability criteria.“Many market participants across the globe are increasingly pursuing a sustainable investing agenda that aligns with their own environmental, social, and governance preferences,” said Ed Tilly, chief executive of Cboe Global Markets.

Academics Attack ESG for Failure to Outperform During Crisis

In the aftermath of March’s coronavirus crash, numerous fund managers and data providers determined that companies with high ESG scores outperformed during the rapid sell-off — and a surge of money followed into funds focused on environmental, social, and governance issues.A new academic study, however, raises questions about the link between ESG considerations and stock performance during crises.Researchers from Canada’s University of Waterloo, Tilburg University in the Netherlands, and New York University’s Stern School of Business challenged the “widespread claims by fund managers, ESG data purveyors, and the financial press” that companies with high ESG scores were better situated in the pandemic. In particular, the authors — Elizabeth Demers, Jurian Hendrikse, Philip Joos, and Bauch Lev — cited reports from BlackRock, Morningstar, and MSCI, which all found that ESG funds outperformed during the crash.

Short Selling is an Essential Tool for Responsible Investment

The Alternative Investment Management Association (AIMA) and international law firm Simmons & Simmons have worked with some of the world’s leading alternative investment managers to examine how short selling can be used in the context of responsible investment.The paper describes how hedge fund firms can use their unique investment abilities to accomplish an important goal of responsible investment: protecting against undesired key risks such as climate risk. The example of ‘carbon footprinting’ is used. By properly accounting for the carbon exposure of both their long and their short portfolios, the study concludes, alternative investment managers and their investors can gain crucial insights into how exposed their investments are to climate change and the attendant policy changes. Short selling can thus be used to accomplish a crucial goal of responsible investment: protecting investors from ESG risks.“Alternative investment managers have always been at the forefront of investment innovation,” said AIMA CEO Jack Inglis. “Today, they are using one of their defining abilities—short-selling—to protect their investors from novel risks, and to make markets as a whole safer. We are happy to see this fact gain increasing recognition from investors and leading organizations such as the PRI, and we have no doubt that...

ESG in Structured Finance Transactions

A concern for the environment, fair treatment and the rule of law are not new. However, in a post-industrial and capitalist world where technological advancement and profit have for so long been the goals of large corporations and many individuals, the perception and urgency of these considerations is beginning to change. Whether you are attending structured finance conferences or reading magazine articles in the financial press, the buzzword or phrase has very much become ESG.

ESG disclosure now ‘firmly’ in the mainstream – report

A new report assessing the regulatory landscape for sustainability reporting has found that environmental, social and governance (ESG) disclosure has never been more pervasive globally - and is now firmly in the mainstream of disclosure on organizational performance.As the market implications of certain ESG topics become more evident, interest in the quality of disclosures is also sharpening, according to the fifth edition of Carrots & Sticks (C&S) report.The annual report is an analysis of the latest trends in reporting provisions, covering 614 reporting requirements and resources (a substantial increase on the 383 assessed in the previous report in 2016) across over 80 countries, including the world's 60 largest economies.

‘If not Europe, who else?’ EU under pressure to secure green recovery at crunch...

European Union leaders were meeting in Brussels on Friday to battle over a proposed multi-billion euro stimulus package, which investors, activists and lawmakers said would need strict rules to guarantee a “green” recovery from the coronavirus pandemic.Under discussion at Friday’s summit is the EU’s next long-term budget, worth around 1 trillion euros, plus a proposed 750 billion euro recovery fund of grants and loans aimed at rebuilding virus-hit economies. The European Commission, the bloc’s executive arm, has said the economic destruction wreaked by the virus would not shake its plans to make the EU “climate neutral” by 2050, and promised that recovery spending would drive green growth.

Virus has boosted investor interest in ESG

23 percent of respondents in a survey by BNP Paribas Asset Management say environmental, social and governance aspects (ESG) have become an even greater focus, since the covid-19 crisis started. In a summary of what it refers to as a market study, performed by Greenwich Associates, the bank says 81 percent of respondents already take ESG considerations into account in all or part of their portfolios, and that another 16 percent plan to. The summary does not discuss how respondents were sourced or how many they were in absolute numbers. The most common reasons cited were to positively impact society or the environment (80 percent), reduce risk (58 percent) and to meet stakeholder needs (47 percent).The S closes in on E and GMore than a fifth of respondents, 23 percent, said ESG has become ‘more of a focus/more important’ with the coronavirus crisis. The market was apparently geographically split on the issue, though: with French respondents the number was 42 percent, while a mere 3 percent in Germany.Taking a separate look at each of the three ESG factors, environment and governance stay in the lead as considered most important. That said, social criteria is the factor that has been boosted most since the start of...

Looking for Sustainability in Energy SDG Credits

A new report by two analysts at Robeco discusses sustainability trends in energy credits, especially in the era of Covid 19. The analysts acknowledge the demand collapse that is keeping crude oil, and accordingly alternatives fuels, at very low values. Their focus is on what lies ahead for energy credits.Frances Pang and Guido Moret make the point that it is not merely Covid-19 that has shocked the energy markets in recent months. They also give space to the failure of OPEC to reach an accord with Russia in March. Relations within “OPEC+” continue to be tricky. Recent reports have OPEC and Russia together demanding that producers that exceeded quotas in April and May compensate by extra cuts through the third quarter.
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