Here are three stories that we found particularly interesting this week and why. We also give our lateral thought on each one.
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ESG funds abound in Europe - job done?
According to an article in the Financial Advisor Magazine, asset managers trying to sell funds in Europe are finding it “increasingly difficult” to do so unless their products are registered as ESG positive - quoting a study by analysts at Goldman Sachs.
At one level this should be a cause for celebration. At least in Europe ESG fund scoring is now mainstream. But let's dig a bit deeper, we are actually only at base camp in what will become a more challenging, but more interesting and productive journey.
We know that just investing via ESG scored funds is not the best way to make a real contribution to the sustainability transitions (contact us if you want the research that backs this up).
What actually works is putting capital to work in companies that are involved in sustainable activities. In Europe this means Article 9 funds, but finding investments that meet the Article 9 criteria will increasingly require some lateral thought. Current popular sectors are water utilities, mortgage REITs, and independent power and renewable electricity producers - not really a diversified portfolio!