STAMFORD, Conn., June 14 /PRNewswire/ -- The cover story of ai5000's May/June issue, available at ai5000.com, suggests that pension plans can improve investment results when environmental, social and governance (ESG) criteria are considered.
"Pension plans and investment advisors have begun to realize that companies with a strong record of managing ESG risks are likely to be effective corporate stewards overall," observed editor-in-chief Kip McDaniel. "All else being equal, those companies and their managements should deliver superior earnings results over time."
How a company manages ESG challenges is revealing, according to one major institutional investor that spoke to ai5000. Another commented that when analyzing a company, "We throw a huge pile of social and environmental issues on the table and use them to judge the management of the firm. ... It's just as much about the ability to manage risks as about doing good."
McDaniel noted that ESG investing is still in its infancy, but is steadily making the leap from academic research to real world asset management. Shortly after ai5000 went to press, MSCI announced plans to incorporate ESG risk into its indices.
"For years, the inclination of many plan sponsors and money managers was to roll their eyes when ESG advocates contended that investors should strongly consider issues such as emissions, resource usage, employee safety and board composition," said McDaniel. "Now there is grudging acknowledgement that these issues can provide valuable insights about a company's strengths and weaknesses."
A quarterly online publication, ai5000 focuses on the 5,000 largest pools of capital in the world, across pension plans, sovereign wealth funds, endowments, foundations, insurance funds and other leading institutional investors. ai5000 is edited by Charles Ruffel, founder of Asset International and PLANSPONSOR, PLANADVISER and Global Custodian.
About Asset International
Asset International is a privately-held provider of information and technology to global pension funds, asset managers, financial advisers, banking service providers, and other financial institutions in the private and public sector. Its industry-leading brands include Strategic Insight, SIMFUND, PLANSPONSOR, PLANADVISER, Global Custodian, and The Trade. The company was acquired in January 2009 by Austin Ventures and has offices in New York, London, Hong Kong and Stamford, CT.