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thinking about the strategy in terms of
categories. Treichel named three. The
first, impact, she said, is the direct
investment in companies created to " do
good for the world, while also aiming for
financial return. The second category
can be described as ESG screens, [and]
that could be both the positive inclusion
of things or negative exclusion, " she said.
" That's what most people traditionally
think [of] as ESG.
" The last category ... is ESG integration:
This is the incorporation of E, S and
G factors, and you might just be looking
at [incorporating] one factor or all three
into
the
he said. " Those will be taking on more
risk [than will an engagement strategy]
because you're zeroing in on a given sector
or a given investment thesis. "
" [With] those five buckets, we can
start saying, 'OK, they're different strategies,
which one appeals to you?' " Henisz
said.
Contrast this depth of options with
investment process through
research and data to seek improved
financial returns. " An investment, fund
or firm " doesn't have to be labeled ESG
or sustainable to be ESG integration, "
she noted.
Witold Henisz, vice dean and
faculty director of the ESG initiative at
The Wharton School at the University
of Pennsylvania, underscored the value
of approaching ESG investment in this
way. Doing so can help plan sponsors
and retirement plan advisers learn what
constitutes ESG and how to communicate
that to plan participants, he said.
He suggested two further categories.
" One is an engagement strategy [in which]
you don't need to shift your portfolio at
all; you could buy an S&P 500 fund that
just votes according to ESG principles, " he
said, citing Engine No. 1, an activist and
impact-focused investment firm, as an
example. The second category is thematic.
" Investors might want a water-focused or a
gender-focused or a carbon-neutral fund, "
the 1960s and '70s, " where we started,
with funds looking at not investing in
munitions during the Vietnam War, "
Henisz said. " We're shifting from values
to value and putting that front and
center; this is about a business case, and
that dampens much of the criticism to
ESG we've seen in recent months. "
Henisz had more to say, from a historical
perspective: " What's different about
ESG [now]-and really important, particularly
given the political rhetoric around the
midterm elections and probably over the
coming years-is that it has evolved. We've
increasingly seen there's an economic
rationale, not just an ideological rationale,
for attending to ESG factors.
" The whole moniker of ESG as
opposed to [corporate] social responsibility
... was really designed to shift the focus
and make this about the business case,
taking into account the boycotts, the physical
and transition risks of climate change,
the lawsuits that might arise if you don't
treat your workforce appropriately. "
Additionally, he addressed Republican-led
opposition to ESG investing
for state
retirement plan participants,
which has cropped up in several U.S.
states.
" When you hear opponents of ESG
saying, 'We're not going to have those
woke liberals on the East Coast tell us
about what should go into our [state]
plan; we're not going to let their ideology
[in]'-ESG isn't
about
ideology.
It's
about economics, it's about getting the
economics right [and] about how environmental,
social and governance factors
affect an investment
thesis. There are
different ways of doing that. "
Ultimately, for the retirement sector,
better understanding ESG " comes back
to where we started, and to educating, "
he said. -Noah Zuss
Agenda
During the full-day
virtual conference, we
explored the following
topics:
n What Is ESG?
n ESG Investing:
Political Agenda
or Economic
Factor?
n An ESG Path
Forward
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PLANSPONSOR - December 2022-February 2023

Table of Contents for the Digital Edition of PLANSPONSOR - December 2022-February 2023

INSIGHTS
RULES & REGULATIONS
PARTICIPANT ANALYSIS
UPFRONT
Risk Protection
Benchmarking Beyond Fees
Exploring ESG Investing
In Case of Emergency
Employee-Owned
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2022-February 2023 - Cover1
PLANSPONSOR - December 2022-February 2023 - Cover2
PLANSPONSOR - December 2022-February 2023 - 1
PLANSPONSOR - December 2022-February 2023 - INSIGHTS
PLANSPONSOR - December 2022-February 2023 - 3
PLANSPONSOR - December 2022-February 2023 - RULES & REGULATIONS
PLANSPONSOR - December 2022-February 2023 - 5
PLANSPONSOR - December 2022-February 2023 - 6
PLANSPONSOR - December 2022-February 2023 - PARTICIPANT ANALYSIS
PLANSPONSOR - December 2022-February 2023 - UPFRONT
PLANSPONSOR - December 2022-February 2023 - 9
PLANSPONSOR - December 2022-February 2023 - 10
PLANSPONSOR - December 2022-February 2023 - 11
PLANSPONSOR - December 2022-February 2023 - 12
PLANSPONSOR - December 2022-February 2023 - 13
PLANSPONSOR - December 2022-February 2023 - Risk Protection
PLANSPONSOR - December 2022-February 2023 - 15
PLANSPONSOR - December 2022-February 2023 - 16
PLANSPONSOR - December 2022-February 2023 - 17
PLANSPONSOR - December 2022-February 2023 - Benchmarking Beyond Fees
PLANSPONSOR - December 2022-February 2023 - 19
PLANSPONSOR - December 2022-February 2023 - 20
PLANSPONSOR - December 2022-February 2023 - 21
PLANSPONSOR - December 2022-February 2023 - 22
PLANSPONSOR - December 2022-February 2023 - 23
PLANSPONSOR - December 2022-February 2023 - 24
PLANSPONSOR - December 2022-February 2023 - 25
PLANSPONSOR - December 2022-February 2023 - 26
PLANSPONSOR - December 2022-February 2023 - 27
PLANSPONSOR - December 2022-February 2023 - Exploring ESG Investing
PLANSPONSOR - December 2022-February 2023 - 29
PLANSPONSOR - December 2022-February 2023 - 30
PLANSPONSOR - December 2022-February 2023 - 31
PLANSPONSOR - December 2022-February 2023 - 32
PLANSPONSOR - December 2022-February 2023 - 33
PLANSPONSOR - December 2022-February 2023 - In Case of Emergency
PLANSPONSOR - December 2022-February 2023 - 35
PLANSPONSOR - December 2022-February 2023 - Employee-Owned
PLANSPONSOR - December 2022-February 2023 - 37
PLANSPONSOR - December 2022-February 2023 - FIDUCIARY FORUM
PLANSPONSOR - December 2022-February 2023 - INSIDE ANGLE
PLANSPONSOR - December 2022-February 2023 - PLAN PROFILE
PLANSPONSOR - December 2022-February 2023 - Cover3
PLANSPONSOR - December 2022-February 2023 - Cover4
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