3 Questions
Which of the following is NOT a way in which institutional investors reflect ESG considerations?
Marketing engagement
What is the United Nations Global Compact (UNGC)?
A set of principles to assess and engage with companies to become more sustainable
How can asset owners and some asset managers incorporate ESG considerations into their investment strategies?
By incorporating ESG issues into their security selection process
Study Notes
- ESG investing incorporates ESG factors in investment decisions and active ownership.
- Institutional investors reflect ESG considerations in three ways: investment decisions, corporate engagement, and policy engagement.
- Asset owners can include ESG factors in their requests for proposal and consider them in their appointment process.
- Asset owners and some asset managers can embed ESG considerations into strategic asset allocation (SAA).
- Asset managers and owners can incorporate ESG issues into their security selection process.
- Shareholder engagement can encourage investees to improve their ESG practices via a company's annual general meeting (AGM).
- Policy engagement by institutional investors is a natural extension of an investor's responsibilities and fiduciary duties to the interests of beneficiaries.
- Investors can work with regulators, standard setters, and other parties to design a financial system that brings ESG factors more effectively into financial decision making.
- The United Nations Global Compact (UNGC) is the largest corporate sustainability initiative in the world, with over 8,000 corporate signatories.
- The UNGC has provided investors with a helpful set of principles to assess and engage with companies, as well as directly aided companies in becoming more sustainable.
Are you up to speed on ESG investing and the ways in which institutional investors incorporate ESG factors into their decision-making processes? Test your knowledge with this quiz, which covers topics such as shareholder engagement, policy engagement, and the role of the United Nations Global Compact in promoting corporate sustainability. Challenge yourself to see how much you know about this important and evolving field.
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