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ESG and Sustainable Investing

The importance of ESG and sustainable investing continues to grow, climbing in the agenda of regulators, banks, institutional investors, fund managers, asset owners and associated service providers such credit rating agencies, index providers and market exchanges.

It is estimated that circa $23 trillion of AuM globally follow widely defined sustainable investing strategies. The UN Principles for Responsible Investment have almost 2000 signatories totalling $80 trillion AUM. However, many issues remain and further clarifications are required to evidence the strategic and financial benefits of ESG and sustainable investing.

Our current ESG workstream has been going on for 2 years and is led by a group of leading investors whom focus on key areas through the practical lens of these investment professionals and this is reflected in the practical nature of our thinking and the workstream also provided some much needed recommendations set against the key challenges we have identified.

 

Projects

The Green Performance Premium: Examining Historical Green Asset Performance and the Contribution of ESG-practices to Micro- and Macro-Economic Performance

As part of the UK PACT, the Oxford Sustainable Finance Programme at the University of Oxford and the International Institute of Green Finance at the Central University of Finance and Economics in Beijing are undertaking a joint project, The Green Performance Premium. The project aims to address two inter-related barriers to increased green investment and the widespread adoption of ESG-related practices: 1) investors and lenders not allocating more capital to green assets due to such assets being perceived as riskier due to missing historical performance data and 2) policymakers and regulators not prioritising ESG-related practices due to a lack of insight into micro- and macro-economic benefits.

More information can be found here.

ESG disclosure and integration for a green and sustainable two-way opening of investment markets in China

UNPRI, the United Nations Environment Programme Finance Initiative (UNEP FI) and SynTao Green Finance (STGF) will collaborate on a one-year project, partly funded by the UK Government.

The overall objective of this project is to assist in developing an investment and regulatory environment that promotes consideration of financially material ESG issues in China, consistent with the modern interpretation of investor obligations and duties.

The project will also undertake research, regulatory dialogue and market consultation to support a green and sustainable ‘two-way opening’ of China’s investment market, as well as develop capacity building and investor education tools.