ARX Series
Environmental, Social, and Governance Issues
Editor's Selection
Overview
Analysis of environmental, social and governance (ESG) issues is an important part of the investment process. CFA Institute encourages all investment professionals to consider material ESG factors when making investment decisions. The Institute is also strongly focused on developing educational tools on ESG for its members and for the broader investment management industry. Below are the most notable ESG posts selected by the ARX Editorial Team.
Select "Research" in the main menu to find more ESG content in ARX's repository of more than 5,000 posts.
WEBINAR: 2023 ESG & Climate Trends to Watch - The APAC View
We are proud to partner with MSCI for a ESG webinar series! Our first webinar explored 2023 ESG and climate trends in APAC. Check out the recording now!
28 February 2023 | CFA Institute; MSCI | Video: 61 mins.
The Effect of Regulation-Induced Pollution on Corporate Philanthropy
We investigate the role of charitable giving as a form of reputation insurance by analyzing donations to nonprofits from philanthropic foundations of polluting firms.
07 December 2022 | Seungho Choi; Raphael Jonghyeon Park; Simon Xu
Nissan: Shift expectations with an SLB?
AFII proposes an SLB for Nissan based on its existing sustainable finance framework. We provide hypothetical pricing, which shows that Nissan could achieve an estimated discount of 14bp on its 5y financing spreads.
05 February 2023 | Cedric Rimaud, CFA; Josephine Richardson; Ulf Erlandsson; Anthropocene Fixed Income Institute
Rethinking Sustainable Investing Approaches
An effective sustainable investment approach will require an understanding of the challenges that asset managers are facing today. MFS and Eurasia Group convened a series of discussions to flesh out these challenges.
17 February 2023 | Pilar Gomez-Bravo; Vishal Hindocha; Shari Friedman; Jens Larsen; MFS Investment Management
ESG and Climate Trends to Watch for 2023
Discover what trends may shape the environment for investors and companies in the year ahead.
16 January 2023 | MSCI
Stewardship at MFS in Practice: ExxonMobil Case Study
This MFS Case Study illustrates our collaborative, security-specific approach to proxy voting.
22 December 2022 | MFS Investment Management
ESG Materiality and Responsible Investments: Evidence from Real Estate Investment Trusts
This study indicates that material/immaterial ESG negatively/positively predict expected returns. Investors in REITs are found to be more rational than environmental driven, and they price assets regardless of ESG materiality.
07 December 2022 | Kwok Yuen Fan; Jianfu Shen; Eddie Chi-man Hui; Louis T.W. Cheng
Risk-Neutral Pricing of SLBs and Step-down Structures
This paper analyses Sustainability-Linked Bonds (SLBs) through a risk-neutral present value scenario approach.
29 October 2022 | Ulf Erlandsson; Stephanie Mielnik; Josephine Richardson; Cedric Rimaud; Anthropocene Fixed Income Institute
Ecosystem Growth: Japanese ESG Indices and Passive Investing Blossom
This analysis looks at the attribution analysis of the FTSE Blossom Japan Index Series compared to the broad-market index, and the growth of index-linked SGX FTSE Blossom Japan Index Futures.
30 November 2022 | Atsuhito Mori; Ken Hirose; FTSE Russell (Written in collaboration with SGX)
WEBINAR: ESG Competencies for Your Career - Key Updates to the Certificate in ESG Investing
In our latest webinar “ESG Competencies for Your Career”, speakers shared their perspectives on ESG talent development. Key updates to our Certificate in ESG Investing, which aims to meet the growing demand for ESG talent from financial institutions, were also provided.
9 December 2022 | CFA Institute | Video: 63 mins.
ESG in Action: Linde
This case study highlights the importance of adopting a system-wide perspective on corporate emissions data accounting and reporting while pursuing workable solutions in the journey to net zero.
25 November 2022 | MFS Investment Management
WEBINAR: Guidelines for ESG Integration in Equity Analysis and Presentation in Analyst Research Reports
Co-hosted by the Securities and Exchange Commission Thailand and CFA Society Thailand, the webinar covered various approaches to ESG integration and their respective case studies.
24 November 2022 | CFA Institute; CFA Society Thailand; Securities and Exchange Commission Thailand | Video: 2hrs 1min.
Measuring Board Gender Diversity across S&P ESG Indices
According to numerous studies, having a gender-diverse board is a key indicator of good corporate governance. Using the S&P Global SFDR dataset we examine this metric in the context of the S&P ESG Indices.
19 October 2022 | Kieran Trevor; S&P Dow Jones Indices
The COP27 Net Zero Atlas
Our Cop27 Net Zero Atlas builds on our inaugural report to systematically assess climate targets and mitigation strategies of G20 countries'. It also includes analysis of physical climate risk exposure for each G20 country for the first time.
14 November 2022 | Nicolas Lancesseur; Florian Gallo; Edmund Bourne; Claire Hugo; Jaakko Kooroshy; FTSE Russell
Understanding ESG Investing in Asia-Pacific Emerging Markets
In collaboration with CFA Societies in APAC, ARX organized a closed-door roundtable among industry practitioners to examine ESG investing in emerging markets. Key topics included latest trends, regulations, and technological innovations.
November 2022 | CFA Institute
WEBINAR: Modern Slavery Webinar Series - Tackling Modern Slavery through Investment Management
Presenting to you the Modern Slavery Webinar Series co-organized by CFA Societies Australia and Monash University! This second webinar focuses on how investors can identify and address exposure to modern slavery risks in portfolios.
10 November 2022 | CFA Societies Australia; Monash University; RIAA | Video: 59 mins.
Tripod for Scaling-up Climate Finance: NDC, NFV, and ESG
Korea submitted the reinforced NDC last year. The realized path so far has been above the target path. The Korean NFV was established this year. The presentation looks at the potential of streaming private ESG investment to public climate finance.
26 October 2022 | Ick Jin, PhD, CFA, CIPM
The Future of Electric Vehicles in Asia
Much attention is being paid to electric vehicles (EVs) in the green transition because the technology already exists to help governments reduce emissions at reasonable costs.
04 March 2022 | Alicia Garcia Herrero; HKUST Institute for Emerging Market Studies (IEMS)
Independent Directors in Pakistan - Regulations & Practice
This publication is prepared with respect to independent directors currently serving on boards of various companies in Pakistan. It mainly focuses on their role, responsibility, diversity, selection, remuneration, representation, and board terms.
25 October 2022 | Mohammad Shoaib, CFA; Shahzad Saleem, CFA; CFA Society Pakistan; The Pakistan Credit Rating Agency
Using Indices to Help Align ESG Goals and Values
Take a closer look at the importance of index construction and underlying data across the ESG spectrum with S&P DJI’s Ben Leale-Green.
24 August 2022 | S&P Dow Jones Indices
Green Equity Exposure in a 1.5°C Scenario
Produced in collaboration with the IIGCC, this paper will inform climate investment decision-making, building the green economy exposure of their equity portfolios and climate benchmarks in line with a 1.5°C temperature scenario.
28 September 2022 | Lily Dai; William Nicolle; Jaakko Kooroshy; Lee Clements; FTSE Russell
China Sustainable Funds 1H 2022 Review / 2022年上半年中国可持续基金表现回顾
China’s sustainable funds saw a decline in the total assets under management (AUM) in the first half of 2022, dropping 11% from the all-time record of RMB 227 billion at the end of 2021 to the current RMB 203 billion (roughly USD 30bn).
2022年上半年，可持续基金资产净值的减少和突然转变的净流出则反映了中国资本市场整体疲软，投资者信心受到全球经济衰退、高通胀压力和国内主要城市新冠疫情有所反复的影响。
30 August 2022 | Fay Wu; Jiaye Pan; MioTech
A Framework for Assessing Natural Capital Risks and Opportunities in the Food Sector
This ESG in Depth examines the topic of natural capital and how it, along with the ecosystem services its provides, poses a material systematic risk and at the same time presents opportunities in several key sectors.
10 August 2022 | MFS Investment Management
ZSL releases new research on the timber and pulp industry
This year’s ZSL SPOTT assessments saw 100 timber & pulp producers, processors and traders assessed against 179 environmental, social and governance (ESG) indicators. See the results to find out the key sustainability issues across the sector.
03 Aug 2022 | Fergus Campbell, Zoological Society of London - ZSL SPOTT.
Navigating Social and Sustainability Bonds
This research paper aims to help investors and other market participants to better understand the development, trends, challenges and opportunities of the social and sustainability bond market.
20 July 2022 | Alan Meng, Lee Clements, Lily Chung, FTSE Russell
Dealing with income bias in sovereign ESG scores: Sovereign ESG revisited
Using a simple statistical framework and our proprietary Sovereign Risk Monitor (SRM) methodology, we estimate a log-linear relationship between the income level of economies and their respective E, S and G performance assessment.
12 July 2022 | Julien Moussavi, Lazar Karapandza, FTSE Russell
What Is Internal Carbon Pricing And How Can It Help Achieve Net-Zero Goal?
CDP published a report on ICP in collaboration with CPLC. The report looks at the importance of carbon pricing in allowing businesses to transition to more sustainable operations, with a key focus on emerging economies.
1 May 2022 | CDP, The Carbon Pricing Leadership Coalition
WEBINAR: ESG Talent Development Trends and Strategies
CFA Institute is proud to offer the Certificate in ESG Investing to help firms and individuals stay competitive, and to equip them with skills to better integrate ESG factors into their investment analysis and client conversations. This information session highlights the latest trends and opportunities in the ESG investment space, presents details of the curriculum of the Certificate in ESG Investing, and offers a discussion with industry leaders on how they are filling the ESG talent gap in their companies.
7 June 2022 | CFA Institute | Video: 1 hr 32 min.
#WhyESGMatters: The Handbook - 2nd Edition
Sourced from HSBC's global network of over 300 analysts, this handbook aims to help you broaden your knowledge of key areas of the increasingly important and fast moving world of ESG.
4 May 2022 | Wai-Shin Chan, HSBC Global Research
Rising to the Challenge: How Companies in Asia Pacific are Preparing for the Net-Zero Economy
CDP, in partnership with South Pole, analyses the climate disclosures of almost 4000 Asia Pacific companies. Despite increased commitment toward emissions reduction, there is a significant ambition gap in meeting the Paris Agreement goals.
31 March 2022 | CDP, South Pole
Mind the Gaps: Clarifying Corporate Carbon
The paper surveys the current state of corporate carbon disclosure, explores the challenges facing investors in using estimation strategies and introduces a new FTSE Russell carbon emission dataset for c. 10,000 companies.
17 May 2022 | FTSE Russell: John Simmons, Jaakko Kooroshy, Edmund Bourne, Mallika Jain, Lee Clements
Geothermal: Earth’s Natural Battery Power
We look at the scope, the technology, and industry players in the niche but important energy source on the path to net zero.
10 May 2022 | MioTech
Bringing ESG Considerations to Australian Strategies
The S&P/ASX 200 ESG Index draws on the intelligence of the S&P DJI ESG Scores, which robustly measure companies’ ESG risk and performance factors to measure the performance of securities from the benchmark index that meet sustainability criteria.
21 April 2022 | S&P Dow Jones Indices
The S&P PACT Indices: Leading the Net Zero Charge for Two Years
Two years is a long time in the sphere of ESG. While the world wrestled with the worst pandemic in a century, S&P Dow Jones Indices (S&P DJI) shook the ESG indexing space and cemented its position as a leader in climate indices.
20 April 2022 | S&P Dow Jones Indices
How Asset Owners Prioritize Action on Climate Change: 2021 Global Survey Findings from Asset Owners
This report examines how assets owners around the world are prioritizing positive action on climate change and how they are actively engaging as shareholders to encourage corporates to accelerate their own climate-focused initiatives.
6 May 2022 | FTSE Russell
On Greener Pastures: Global Sustainability Funds Development 2021-22
With global sustainability assets reaching US$2.74 trillion in 2021, how are investment pools developing and performing globally?
28 April 2022 | MioTech; Fay Wu
Blue Suits and Greenflation: Exploring ESG Integration
Our fixed income ESG analyst explains what "greenflation" is and discusses why ESG integration into an active fixed income investment process matters so much.
10 August 2022 | MFS Investment Management
WEBINAR: Modern Slavery - Legal and Regulatory Landscape
Watch the recorded webinar as it discusses the current state of modern slavery risks, the impact of the COVID-pandemic and the evolving legal and regulatory landscape in several key markets like Australia and Thailand.
27 April 2022 | CFA Institute, Monash University
Reframing Fund Managers’ Increasing Climate Compliance Requirements
Ideas to encourage the early and robust application of the likes of the SFC's revised FMCC - it's based on science, starts with identifying/assessing, and makes so much sense from the five perspectives included (and more!)
22 April 2022 | Red Links; Fiona Donnelly
Measuring Modern Slavery Statement Disclosure Quality
Do the largest ASX-listed companies fully understand and disclose their modern slavery risks in their operations and supply chains, as required by Australia's Modern Slavery Act (2018)? Disappointingly, more than a third of them don't.
19 April 2022 | Monash Centre for Financial Studies, Nga Pham, Bei Cui, Ummul Ruthbah
碳中和元年的中国政策与推进状况—全球碳中和背景下的中国发展
面对全球气候变化引发的一系列环境危机与国际政治经济问题，联合国近年来不断督促世界各国积极采取有效行动以减少温室气体排放，增强应对气候变化的防御力。
12 April 2022 | 金融市场研究; 王文，刘锦涛
Highlights of Panel Discussion on SRI Taxonomy
Part 5 of the SRI series focused on taxonomy of sustainable investing. The document comprises summarized views on topics like principles-based taxonomy, classification of environmental objectives, financing credit transitions and transition strategy.
8 April 2022 | CFA Society Malaysia
WEBINAR: APAC ESG Investment Strategy: Identifying APAC's ESG Trend-setters
Watch the recorded webinar on 2022 ESG trends to watch and trend-setters in the APAC region, with a zoom-in on climate change, biodiversity and supply chains.
7 April 2022 | CFA Institute, MSCI
Green or Brown: Which Overpriced Stock to Short Sell?
This research shows a negative relationship between firm’s ESG performance and short selling demand among overpriced stocks. Shorting overpriced stocks with high ESG scores exposes the trader to higher risk.
31 March 2022 | Weiming Zhang
Integrating ESG into Core Japanese Benchmarks
The FTSE Blossom Japan Index helps investors integrate ESG considerations and enhance ESG exposure, while maintaining the index characteristics of a broad market benchmark. It also provides a strong basis for corporate engagement.
31 March 2022 | Atsuhito Mori, FTSE Russell
氣候變化危機與ESG投資機遇 : 投資者教育講座
氣候變化是世界關注的重要議題，各國政府相繼推出減排目標及政策，對未來環球經濟及社會發展有深遠的影響。但很多投資者未意識到「綠色投資、ESG、可持續投資」的重要性，不少人的認知仍停留在個別板塊投資機會或社會責任層面。是次講座將從宏觀角度探討氣候變化及碳中和政策如何影響未來經濟發展，以及相關投資機遇及風險。講座亦會討論散戶投資者如何參與綠色/ESG/可持續投資，以及相關基本知識。
17 March 2022 | CFA Institute, CFA Society Hong Kong, IFEC
Watch Webinar (in Cantonese) >
Gauging Opportunities from the Hydrogen Economy
The Fourth Industrial Revolution will be driven by renewable energy, and in the context of energy transition, hydrogen could play a vital role.
7 March 2022 | S&P Dow Jones Indices
Advent of ESG Ecosystem In India
In India, there is a growing recognition of the importance of ESG factors and their material impact on corporate sustainability. This recognition is coming from all the stakeholders of the markets.
1 March 2022 | Mohd Merajuddin Inamdar, Dr. (CA) Minaxi A Rachchh
Breaking Down Real Estate Net-Zero Targets
In this report, we outline an approach to evaluate real estate funds’ and companies’ decarbonization and net-zero commitments and targets. The goal is to help the wider industry set comprehensive, ambitious and feasible net-zero commitments.
10 March 2022 | MSCI: Antonios Panagiotopoulos, Bert Teuben
2022 ESG Trends to Watch / 2022 年 ESG 趋势展望
Over the last decade, ESG has gone from fringe to mainstream. Investors and companies have seen increased regulation, demands for transparency and a quest for standards. MSCI presents ten ESG trends to watch in 2022.
2022 年和未来十年会有哪些趋势？ 近年来，气候变化已经超越公司治理，成为最紧迫且备受投资者关注的环境、社会、公司治理（ESG）议题。与此同时，ESG 投资也已经真正成为主流的投资方式，(并持续受到监管机构的关注）。然而，未来十年，企业、投资者和我们所在的地球都将面临更多新的风险，考验我们能否从过去的经历中吸取教训。
10 March 2022 | MSCI: Linda-Eling Lee, Meggin Thwing Eastman
Sustainable Investments Insights: Quarterly Report - February 2022
Decarbonization and green-technology strategies suffered most from surging fossil-fuel prices and the resulting selloff in alternative energy stocks. Yield-curve steepening weighed on sustainable strategies that have large underweights in financials.
2 March 2022 | FTSE Russell
Sustainability in the Natural Rubber Supply Chain: Getting the Basics Right
Downstream companies and financial institutions hold the key to driving significant environmental and social changes in the natural rubber industry by committing to and applying sustainable practices and improving sourcing procedures.
21 January 2022 | Fabrice Inkonkoy, Zoological Society of London
Keynote and Fireside Chat: SDG Investing
Watch this pre-recorded CFA Institute Alpha Summit APAC presentation to learn about how to implement UNPRI Sustainable Development Goals in an investment framework.
10 February 2022 | CFA Institute
Panel Discussion: The Pandemic's Impact on Shareholder Activism
Watch this CFA Institute Alpha Summit on-demand video to learn about the changing landscape of shareholder activism in Asia Pacific.
10 February 2022 | CFA Institute
Panel Discussion: Global and Regional ESG Regulations and Standards: Implications for the Financial Services Industry
Watch this CFA Institute Alpha Summit on-demand video to learn how ESG regulations in Asia Pacific are impacting the financial industry.
10 February 2022 | CFA Institute
Panel Discussion: Climate Change Risk – Action for Industry Stakeholders
Watch this pre-recorded CFA Institute Alpha Summit APAC panel discussion to learn about the best practices of integrating climate risk into financial decision-making.
10 February 2022 | CFA Institute
Fireside Chat: Progress in Greening the Financial System: Lessons Learned and Looking Forward
Watch this pre-recorded video session of the 2022 CFA Institute Alpha Summit APAC to learn how financial firms in the region transition to the green economy.
10 February 2022 | CFA Institute
Impact of Debt Maturity and Financing Constraints on Corporate Investment
This study investigates how the maturity structure of a firm’s debt affects its investment decisions. Using data for Chinese firms, we find that debt maturity positively impacts investment, especially for firms that face higher financial constraints.
This paper was submitted for the CFA Institute ARX Best Paper Award at the 26th Annual New Zealand Finance Colloquium 2022.
25 January 2022 | Kuntal K. Das; Nicholas A. Ross
Moving From Risk to Resilience: Climate Change and the Forestry Sector
Lack of disclosures in forestry operations is a missed opportunity, creating data gaps or ‘blind spots’ for financiers and buyers who need to consider their exposure to climate risk.
1 November 2021 | Zoological Society of London, SPOTT initiative: Maggie FitzHerbert, Clara Melot
Tropical Timber: A Guide to Responsible Sourcing and Financing
This report from ZSL SPOTT provides an overview of ESG issues associated with unsustainable timber and pulp production. It provides financial institutions and buyers guidance on the role of certification, and on what they should be asking companies.
26 January 2021 | Zoological Society of London, SPOTT initiative
Financing Food Systems Decarbonisation: The Forgotten Sector
How financial institutions may support the transformation of the food system via allocating funds to innovative business models in mitigating carbon emissions, utilizing innovative financing model to fund climate-smart food production.
21 December 2021 | Asian Institute of Chartered Bankers: Adam Farhan, Fatin Zani
About the Author(s)
Senior Director: Scott Lee
Project Manager: Natalie Yiu
Coordinator: Christy Leung