Daily ESG Briefing: Most asset owners expect to “only allocate to managers with a formal approach to ESG”, says study

The latest developments in sustainable finance

A new survey published by the Morgan Stanley Institute for Sustainable Investing and Morgan Stanley Investment Management has revealed that nearly six in 10 asset owners can envision a time when they will only allocate to investment managers with a formal approach to ESG. The survey, which gathered insights about sustainable investing approaches from 110 institutional investors, found that a majority of asset owners globally claim to actively integrate ESG factors into their investment process.

Sustainalytics, a leading provider of ESG research and data, has launched a Transition Bond Second-Party Opinion Service, which it claims is guided by research from the Intergovernmental Panel on Climate Change and the International Energy Agency and will help investors to make more informed decisions regarding transition-focused investments. Transition bonds differ from traditional green bonds because they finance assets and projects that are not fully green, but will enable the issuer to transition to a low-carbon economy.  

Investors including Aberdeen Standard have waded into discussions about the decision by Rio Tinto to trigger explosions that damaged an ancient Aboriginal heritage site in Australia, according to reports. There are growing concerns about the social performance of the mining giant, as well as the reputation risk stemming from the decision to order the blast. 

The Moving the Market Initiative (MtM), a collaboration between Humanity United, UBS Optimus Foundation and The Freedom Fund, has partnered with The Investment Integration Project (TIIP) to launch a roadmap to help investors address the social risks of COVID-19  investors. The project aims to advance investor action on addressing systemic social risks in the wake of COVID-19. The MtM Initiative and TIIP will co-host a webinar on June 11, 2020 at 11am ET to discuss the project. Link to webinar here.

BMO Financial Group has signed the Operating Principles for Impact Management, becoming the 95th signatory. The Operating Principles were developed by the International Finance Corporation (IFC) to standardise elements of impact investing.