Newsweek Vantage Report Concludes That Environmental, Social & Governance (ESG) Investing Is Going Mainstream

NEW YORK, Sept. 12, 2018 /PRNewswire/ -- Newsweek Media Group, the family of digital-first media brands that start and shape global conversations that matter, today released the results of a new report from their Vantage Thought Leadership division investigating the rise of sustainable and responsible (or ESG) investing.

The study finds that while the Paris Climate Accord, and the adoption of the UN Sustainable Development Goals (SDGs) in 2015 have boosted growth in ESG investing, with three out of four investors now taking account of ESG information in the investment process, ESG has clearly become mainstream

The report, entitled "Going mainstream – The future of ESG investing" is based on a survey of over 280 asset owners and managers from across the world, as well as a dozen in-depth interviews with leading investors and practitioners in ESG investing.

The survey, which asked investors both about current ESG practices as well as outlook, found that climate change is the leading driver of ESG strategies: 65% of investors listed this as their top priority, with a further 50% expecting to have divested from fossil fuels by 2030. Some 60% of investors also have a specific policy on meeting the SDGs.

Still, there is a significant gap between intent and action. Many investors are struggling with a lack of relevant investment information, and a scarcity of ESG investment vehicles. As a result, investors struggle to adopt ESG across their portfolios: just one-quarter of all assets globally are currently managed under ESG strategies.

The report argues that for sustainable investing to become the norm, corporate reporting and standards need to be improved, including, where appropriate, via regulation. Otherwise, there is a risk that the current push to give investments the ESG label turns it into a box-ticking exercise.

Beyond this, there needs to be a change in mindsets. Sustainable investing is often thought of as low-yield, yet data on investment performance show ESG investment strategies can deliver both higher returns and a reduction in volatility. To grasp the opportunity, investment professionals need better education and incentives. Interviewees also agreed on a need to create awareness among the general public, who have the power to demand more from those that manage their investments. 

"The results of the research challenge long held assumptions and prejudices about the use of ESG data in making investment decisions," said the report's author Harry Hummels, Chair in Ethics, Organizations, & Society at the Finance Department of Maastricht University. "Yes, there is work to be done to accelerate change, but we are witnessing a trend which is clearly positive, inspiring and hopeful."

"Newsweek Vantage gives business leaders the in-depth knowledge they need about the ideas that are changing business and the world around us. This report into the fast evolving area of ESG investing is a fascinating look at the opportunities and challenges facing this industry and the companies and individuals operating within it," said Dev Pragad, Chief Executive Officer Newsweek Media Group.

About the authors

Harry Hummels holds a chair in Ethics, Organizations, and Society (focusing on impact investing) at the Finance Department of Maastricht University and a chair in Social Entrepreneurship at Utrecht University School of Economics. In addition, Harry is a Special Advisor of the United Nations Office of Project Services (UNOPS) on Impact Investing. He serves on the UNDP/UNSIF Research Council on Sustainable Development Investments, and on the board of Society Impact in the Netherlands. Harry is co-founder of restaurant Le Souk d'Orient – with a mission to employ refugees – and a member of the advisory board of B Lab Europe. Between 1999 and 2015 Harry held various positions in the financial world, including Director of Sustainable Investing at ING Bank, Director of Responsible Investing and Impact Investing SNS Asset Management/ACTIAM, and European Liaison of the Global Impact Investing Network (GIIN).

Rob Bauer is Professor of Finance (chair: Institutional Investors) at Maastricht University School of Business and Economics in The Netherlands. His academic research is focused on pension funds, strategic investment policy, mutual fund performance, responsible investing, shareholder activism and corporate governance. Rob publishes regularly in professional and academic journals and is a frequent speaker on national and international conferences. Rob is also Director of the European Centre for Corporate Engagement (ECCE) at Maastricht University, and Executive Director of the International Centre for Pension Management (ICPM), at the Rotman School of Management, University of Toronto in Canada. Rob is also founder and managing director of Rob Bauer Consultants in which he advises and supports institutional investors on topics related to strategic investments.

About the survey

Over 280 asset owners and managers from across the world participated in the survey, which was conducted during March and April 2018. Investors were spread almost evenly across the Americas, Europe and Asia-Pacific regions. Around one half had assets under management (AUM) of USD 50bn or more, and around one tenth had AUM of less than USD 15bn. The research was sponsored by UBS Asset Management, AXA Investment Managers, Aegon Asset Management, Triodos Investment Management, Principles for Responsible Investment (PRI), and the US SIF: The Forum for Sustainable and Responsible Investment.

About Newsweek Vantage

A new division in Newsweek that combines original research and expert analysis to explore topics that are defining the global business environment.

About Newsweek Media Group

Newsweek Media Group is a family of digital-first, global media brands that seek to start and shape conversations that matter. We offer an objective perspective to smart and accessible news, media and entertainment to nearly 100 million consumers and business leaders around the world. Headquartered in New York City, Newsweek Media Group owns and operates the iconic Newsweek magazine, Newsweek Events, and digital media properties including the International Business Times, Player.One, Latin Times, and Medical Daily. As one of the world's only truly global media brands, Newsweek Media Group combines the proven agility of the digitally native IBT properties with the trusted integrity, known world-over, of Newsweek. Newsweek Media Group launched Newsweek Events, its global events business in March 2017. International Business Times is a digital news publication that today reaches an average of 57+ million readers each month via eight separate editions, in four languages. Market-specific editions are now available in the U.S., the UK, Australia, China, India, Italy, Japan & Singapore. Newsweek publishes a U.S. and International edition weekly in English. The international edition - branded as Newsweek International - serves the Europe, Middle-East, Africa and Asia-Pacific regions while language-specific editions are available in Japan, Korea, Latin America, Pakistan, Poland and Serbia. A separate Arabic-language edition is also published for the Middle East. The print edition of Newsweek is now available in 68 territories while round-the-clock- coverage on the latest breaking world news can be found at newsweek.com.

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SOURCE Newsweek Media Group

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