Resources

Corporate Engagement in Brief

Corporate engagement is an effective strategy to improve the company ESG/sustainability performance and increase the relative value of assets. Investors and asset managers, along with management boards, are increasingly involved in this process. As PRI research shows, “ESG engagement creates value for both companies and investors, amid growing evidence that engagement by investors with companies on environmental, social and governance (ESG) issues can create shareholder value.”*

Corporate engagement falls within a broader category of active ownership. While active ownership means an exercise of shareholder rights to advocate for improved corporate governance, corporate engagement involves a direct dialogue of asset owners or managers with a company. More precisely, through corporate engagement, asset owners or asset managers bring to the attention of management important issues related to ESG/sustainability performance and request improvements. Engagement can take the form of:

– filing or co-filing advisory resolutions,

– joining shareholder coalitions in order to encourage companies to improve,

– voting on ESG issues at annual meetings.

Investors can also participate in public policy initiatives or collaborate with government agencies. By doing so, often times they get publicity and media attention.

To illustrate the scope of corporate engagement practice, in the US between 2016 and 2018 more than 200 institutional investors and asset managers, with a total of $1.76 trillion in assets, filed over 700 resolutions on ESG issues.** Majority of proposals aimed at facilitating shareholders’ ability to nominate board directors. Among other issues raised by investors were: lobbying and disclosure of political spending, climate change, human rights including fair labor and pay standards, and integrated reporting.

 

source: unpri.org, [1] ussif.org [2]

* unpri.org [1]** ussif.org [2]

Family Offices and Impact Investing

Posted By Katarzyna Wilk on in Sustainable Investing

Along with dynamic developments within the sustainable finance domain, family offices are increasingly involved in sustainable/impact investing. More than a quarter of family foundations are now engaged in impact investing, according to the 2019 Global Family Office report from UBS. 

“The impetus to invest for impact was the recognition that philanthropic assets are limited, and that more money is available to be put to work for social impact if the full investment portfolio is considered.”* according to Pritzker Simmons. While choosing investment products, family offices are value or mission driven, often times within the young generation of millennials playing a significant role in reorienting capital into more sustainable investments. “Impact investing enables families to be explicit about their shared values and to reflect them in their investment and wealth management decisions.”** 

It is important to note that there is no single best approach to sustainable/impact investing that Family Offices may consider to undertake. However, when investments are structured properly and given the fact that ESG driven investments tend to bring comparable or higher financial returns than traditional ones, sustainable investing can bring simultaneously significant financial returns and meaningful impact. The World Economic Forum’s Primer on Impact Investing for Family Offices listed the following strategies:

1. Creating a balanced impact portfolio by gradually overlaying impact across every asset class.

2. Piloting an impact investment with a smaller portion of the portfolio through a one-off investment, via through the family foundation or donor-advised funds.

3. Committing a part of the portfolio to high-impact investments in funds or companies oriented into achieving impacts. 

4. Seeding an investment through backing an existing management team with an proven track record or through establishing a new investment team.

 

Sources: ubs.com [3], weforum.org [4]

* ussif.org, [5] ** weforum.org [4]

Sustainable Finance in the EU

Posted By Katarzyna Wilk on in Sustainable Finance

The EU regards sustainability, including the transition towards a low carbon economy, as key to maintain its competitiveness within the global economy. Given that, in 2009 the EU adopted a Climate and Energy Package of directives and regulations, setting out targets in reducing carbon emissions, along with an increase in renewable energy and energy efficiency by 2020.

The most important part of this package was the EU Emission Trading Scheme (EU ETS), aiming at achieving a significant reduction of greenhouse gas emission by all member states. In addition to this, two other important guidelines were adopted: the Renewable Energy Directive and Greenhouse Gas Accounting Framework for Carbon Capture and Storage Projects. Following these developments, the EU leaders accepted the 2030 Climate and Energy Framework, which led to further legislative proposals, focusing more on sustainable finance.

Most notably, in 2016 the European Commission (EC) established the EU High Level Expert Group on Sustainable Finance, aiming at developing a more sustainable finance system and reorienting the capital towards sustainable investments. In 2018, the EC formulated the EU Action Plan for Financing Sustainable Growth, including three legislative proposals: taxonomy classification system, disclosure of sustainable investments requirements and risks, and benchmark for carbon impacts, in order to provide investors with reliable and comparable data.

In December 2019, the EC, European Parliament and Council adopted the EU Sustainable Finance Taxonomy. The final report on the EU Taxonomy was presented to the EC in March 2020, followed by a publication of a voluntary and non-legislative Green Bond Standard, aiming at enhancing effectiveness, transparency, comparability and credibility of the EU green bond market.

 

sources: ec.europa.eu [6], ec.europa.eu [7]

Training: Sustainable Finance II

Posted By Katarzyna Wilk on in Sustainable Finance

This is an advanced training in Sustainable Finance and Sustainable Investing. Topics include: sustainable financial products, sustainable investment strategies, EU Taxonomy for Sustainable Activities, EU Green Bonds regulations, ESG ratings and indexes application, ESG risks assessment. Some previous experience in sustainable finance and/or sustainable investing is required.

High Values training: Sustainable Finance I [8] and/or ESG Insights & Integration [9] is recommended, prior to taking this course.

For: Asset Managers, Compliance Officers, Sustainability Leaders, Insurance Providers, Policy Makers

Dates: third week of April, 2020, second week of May, 2020

Duration: 5 hours

Language: EN

Place: Zürich

For more information, please contact us at: contact@high-values.com [10]