PLANSPONSOR - October/November 2020 - 32
ESG Across Asset Classes
Most asset managers-though not the DOL-agree with using ESG funds
O
rganizations and individuals
have aligned their investments
with their societal, religious and
political convictions for centuries, but a
collective effort from the big money-pension
funds, endowments, foundations and
sovereign wealth funds-started 30 or 40
years ago and has gone mainstream in the
last two decades. Investing to align with
environmental, social and governance
factors (ESG) is enormous: The United
Nations (U.N.)-supported Principles for
Responsible Investing (PRI), which calls
itself " the world's leading proponent of
responsible investment, " counts among its
members over 500 institutions owning, as
of mid-year, assets of $23.5 trillion and having
3,000 total signatories, including asset
managers and financial service providers.
" In the current institutional environment,
there are very few managers in any
asset class saying they don't think about
ESG considerations, " notes Brian McDonnell,
head of the global pension practice at
Cambridge Associates, an investment firm
headquartered in Boston. Doing so is not
just an exercise in philosophy. " They want
to outperform an index and to identify
any factors that might give them an edge
in forecasting assets' future cash flows. "
But a recent Department of Labor (DOL)
ruling seems designed to discourage ESG
investment and complicate plan management
for socially conscious sponsors.
" ESG started as an exclusionary exercise " -altogether
shunning investment
in companies in offensive businesses,
McDonnell notes. " But we recognize that,
at its core, ESG considerations are investment
information and are increasingly
folded into the day-to-day management of
investment strategies. " Cambridge splits
32 PLANSPONSOR.COM October - November 2020 Art by Wren McDonald
ESG factors into five key global themes:
climate change, natural resource efficiency,
demographic shifts, economic
equality and technological disruption.
The complexity of industries, geographies
and factors has given rise to an
industry of information providers that
helps investors and their managers sort
out the ESG content of their portfolios.
" That's where things get challenging, "
says Tom Mitchell, an ESG expert at
Cambridge and a managing director of the
firm. " To pick two data providers, there is
MSCI, which we look at and utilize, and
Sustainalytics. " (Sustainalytics is a unit of
Institutional Shareholder Services [ISS],
the parent company of PLANSPONSOR.)
" They look at the same investible universe
of companies but have distinct ways of
coming up with their ESG scores. "
That complexity begets further
http://www.PLANSPONSOR.COM
PLANSPONSOR - October/November 2020
Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2020
Time to Take Stock
2020 DC Survey: Plan Benchmarking
Dangers of Debt
Everyone Has a Stake
ESG Across Asset Classes
'Onboard' Education
PLANSPONSOR - October/November 2020 - Cover1
PLANSPONSOR - October/November 2020 - Cover2
PLANSPONSOR - October/November 2020 - 1
PLANSPONSOR - October/November 2020 - 2
PLANSPONSOR - October/November 2020 - 3
PLANSPONSOR - October/November 2020 - 4
PLANSPONSOR - October/November 2020 - 5
PLANSPONSOR - October/November 2020 - 6
PLANSPONSOR - October/November 2020 - 7
PLANSPONSOR - October/November 2020 - 8
PLANSPONSOR - October/November 2020 - 9
PLANSPONSOR - October/November 2020 - 10
PLANSPONSOR - October/November 2020 - 11
PLANSPONSOR - October/November 2020 - 12
PLANSPONSOR - October/November 2020 - 13
PLANSPONSOR - October/November 2020 - 14
PLANSPONSOR - October/November 2020 - 15
PLANSPONSOR - October/November 2020 - Time to Take Stock
PLANSPONSOR - October/November 2020 - 17
PLANSPONSOR - October/November 2020 - 18
PLANSPONSOR - October/November 2020 - 19
PLANSPONSOR - October/November 2020 - 2020 DC Survey: Plan Benchmarking
PLANSPONSOR - October/November 2020 - 21
PLANSPONSOR - October/November 2020 - 22
PLANSPONSOR - October/November 2020 - 23
PLANSPONSOR - October/November 2020 - 24
PLANSPONSOR - October/November 2020 - 25
PLANSPONSOR - October/November 2020 - 26
PLANSPONSOR - October/November 2020 - 27
PLANSPONSOR - October/November 2020 - Dangers of Debt
PLANSPONSOR - October/November 2020 - 29
PLANSPONSOR - October/November 2020 - Everyone Has a Stake
PLANSPONSOR - October/November 2020 - 31
PLANSPONSOR - October/November 2020 - ESG Across Asset Classes
PLANSPONSOR - October/November 2020 - 33
PLANSPONSOR - October/November 2020 - 'Onboard' Education
PLANSPONSOR - October/November 2020 - 35
PLANSPONSOR - October/November 2020 - 36
PLANSPONSOR - October/November 2020 - 37
PLANSPONSOR - October/November 2020 - 38
PLANSPONSOR - October/November 2020 - 39
PLANSPONSOR - October/November 2020 - 40
PLANSPONSOR - October/November 2020 - Cover3
PLANSPONSOR - October/November 2020 - Cover4
https://www.plansponsordigital.com/plansponsor/may_june_2024
https://www.plansponsordigital.com/plansponsor/march_april_2024
https://www.plansponsordigital.com/plansponsor/january_february_2024
https://www.plansponsordigital.com/plansponsor/november_december_2023
https://www.plansponsordigital.com/plansponsor/september_october_2023
https://www.plansponsordigital.com/plansponsor/july_august_2023
https://www.plansponsordigital.com/plansponsor/may_june_2023
https://www.plansponsordigital.com/plansponsor/march_april_2023
https://www.plansponsordigital.com/plansponsor/december_2022_february_2023
https://www.plansponsordigital.com/plansponsor/october_november_2022
https://www.plansponsordigital.com/plansponsor/august_september_2022
https://www.plansponsordigital.com/plansponsor/june_july_2022
https://www.plansponsordigital.com/plansponsor/excellenceawards_2022
https://www.plansponsordigital.com/plansponsor/april_may_2022
https://www.plansponsordigital.com/plansponsor/february_march_2022
https://www.plansponsordigital.com/plansponsor/december_2021_january_2022
https://www.plansponsordigital.com/plansponsor/october_november_2021
https://www.plansponsordigital.com/plansponsor/august_september_2021
https://www.plansponsordigital.com/plansponsor/june_july_2021
https://www.plansponsordigital.com/plansponsor/april-may_2021
https://www.plansponsordigital.com/plansponsor/february-march_2021
https://www.plansponsordigital.com/plansponsor/december-january_2021
https://www.plansponsordigital.com/plansponsor/october-november_2020
https://www.plansponsordigital.com/plansponsor/august-september_2020
https://www.plansponsordigital.com/plansponsor/june-july_2020
https://www.plansponsordigital.com/plansponsor/april-may_2020
https://www.plansponsordigital.com/plansponsor/february-march_2020
https://www.plansponsordigital.com/plansponsor/december-january_2020
https://www.plansponsordigital.com/plansponsor/october-november_2019
https://www.plansponsordigital.com/plansponsor/august-september_2019
https://www.plansponsordigital.com/plansponsor/june-july_2019
https://www.plansponsordigital.com/plansponsor/april-may_2019
https://www.plansponsordigital.com/plansponsor/february-march_2019
https://www.plansponsordigital.com/plansponsor/december_2018-january_2019
https://www.plansponsordigital.com/plansponsor/october-november_2018
https://www.plansponsordigital.com/plansponsor/august-september_2018
https://www.plansponsordigital.com/plansponsor/june-july_2018
https://www.plansponsordigital.com/plansponsor/april-may_2018
https://www.plansponsordigital.com/plansponsor/february-march_2018
https://www.plansponsordigital.com/plansponsor/december_2017-january_2018
https://www.plansponsordigital.com/plansponsor/november_december_2017
https://www.plansponsordigital.com/plansponsor/october_2017
https://www.plansponsordigital.com/plansponsor/september_2017
https://www.nxtbookmedia.com