36 Questions
What are some common features of ESG investing that asset owners and intermediaries seek to identify through request for proposal (RFP) and selection processes?
Voting, engagement, sustainability, and exclusions
According to the ICGN Model Contract Terms between Asset Owners and Managers, what are some areas addressed for ESG-aware investment mandates?
Integration of ESG factors into investment decision making
What is a key aspect highlighted in the International Corporate Governance Network’s (ICGN) model contract terms for ESG-aware investment mandates?
Adherence to good practice around stewardship
What is one of the ways in which portfolios with private or unlisted security exposure may choose to report their performance?
Comparing performance against industry benchmarks
What does the ICGN Model Contract Terms propose for ESG-aware investment mandates in terms of voting and reporting requirements?
Adherence to good practice around stewardship
What are some common features sought by asset owners and intermediaries in ESG investing according to the text?
Screening process, engagement, and decision-making examples
What can help guide the overall approach towards ESG investment?
Statement of investment principles
What should trustees consider when dealing with passive/index tracking mandates in relation to ESG factors?
Considering only the index benchmark without any ESG tilts.
What is a consideration for active equity mandates in terms of ESG factors?
Considering financially material ESG factors in company evaluation.
What is the next challenge after clarifying the client's investment beliefs?
Reflecting operational beliefs in the fund manager's approach
What is a challenge traditionally faced in active equity mandates regarding ESG factors?
Limited data availability and quality for quantitative analysis.
What does aligning timeframes through fees and pay structures help with?
Fully integrating ESG issues into decision-making
What is typically done to ensure that the mandate is fully operational?
Sending detailed questionnaires to potential managers
In the context of active fixed income mandates, what should managers consider regarding ESG risks?
Considering the potential for ESG risks to impact credit ratings and borrowers' future repayments.
What should asset owners ensure when aligning mandates with their beliefs and strategies?
Integration and engagement across all asset classes
What is a possible route for integrating ESG factors in passive/index tracking mandates related to tactical asset allocation?
Considering only the index benchmark without any ESG tilts.
What is a consideration for trustees regarding active equity mandates and the influence on companies' behavior?
Exerting influence on companies through engagement and voting.
What should be ensured by investment managers to reflect client-relevant ESG-aware investment mandates?
Engaging with companies and issuers
What do engagers typically focus on to reflect changes made by companies during the engagement process?
Milestones or objectives
Which factor influences the type of ESG investing strategies that different client types (institutional, retail, private) will find attractive?
Investment objectives and risk/return profiles
What do clients assess and challenge as part of the engagement process, in addition to having direct dialogue with the engagement team?
Engagement metrics and progress
How long is the typical duration of an engagement process in which progress toward concrete change or better practice is measured?
More than 5 years
What is one of the primary drivers influencing ESG investing for different groups of investors, according to Exhibit 5?
Investment objectives and risk/return profiles
What does Exhibit 5 provide insights into regarding different types of clients and their approach to ESG investing?
Primary drivers influencing ESG investing
What should managers consider during the acquisition and development of real estate assets?
Considering material environmental and social risks
How can managers address potential issues and drive change in real estate?
Engage with tenants and community for feedback
What should trustees consider when focusing on private debt mandates?
Identifying and mitigating potential ESG risks during due diligence
What is a crucial aspect of assessing companies targeted in private equity strategies?
Assessing potential for unwanted ESG exposures
Why should managers have ongoing dialogue with borrowers in private equity investments?
To ensure emerging and identified ESG risks are managed
How can trustees contribute to a sustainable future in infrastructure investments?
Biasing portfolios towards infrastructure supporting sustainability
What approach does RBC Global Asset Management take when it comes to incorporating ESG factors into their investment decisions?
Integrating ESG and business assessment with strong risk analysis
In what way does 8 Generation Investment Management construct portfolios of sustainable companies?
By conducting deep research and analysis to select sustainable companies
Why does RBC Global Asset Management believe ESG factors should be integrated into company assessments rather than used as a pre-screen or overlay?
To facilitate engagement and ensure ESG risks and opportunities are considered in valuation analysis
What does 8 Generation Investment Management's differentiated thinking about company performance dynamics lead them to focus on?
Deeper research and analysis to select sustainable companies
Why do leading fund management firms consider ESG factors as non-traditional sources of risk and opportunity?
Because they believe ESG factors can impact a business's long-term success
How do leading fund management firms view the relevance of ESG issues across different industries?
They believe it is crucial to integrate ESG into specific industry assessments
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
