As asset managers are pushed by both regulators and competitive pressure to up their ESG game, the temptation to apply a bright green varnish to existing products is growing. It does look like the risk of being exposed for misrepresenting ESG integration efforts is also on an upward trend. At least in the case of DWS who was first exposed a couple of weeks ago by a disgruntled ex-sustainability head and is now being investigated by both the US and the German FSA. Enough to send a chill down the spine of other greenwashers in disguise?
To understand the increasing importance of net-zero and ESG in manager selection, we caught up with an earlier report published by bfinance which illustrates this important trend. While it may be difficult to ramp up serious ESG analytical capabilities fast enough to meet demand, asset managers can now rely on the services of boutique research firm sustainAx. We talked to founder Dag Messelt to find out more. This week, we also reached out to AP4’s Marcus Svedberg to hear more about his appointment to the Impact Taskforce recently established by the G7.
As decarbonization pressures increase, our Snap column reflects on the fairness of the new emission-related trade barriers governments are starting to sketch out. The Swedish Energy Agency announced a partnership with Gold Standard to facilitate the Swedish Government’s acquisition of quality Internationally Transferred Mitigation Outcomes (ITMOs). It is the first time a government enters such a partnership to procure high-integrity emission reductions to meet their national target through Article 6 of the Paris Agreement. Also in Switzerland, the Federal Council aligned the parameters for future mandatory climate reporting by large Swiss companies with TCFD recommendations. And to round off our Swiss tour, we noted UBS Asset Management’s launch of an Article 8 Small-Cap ETF.
Back in the Nordics, Norges Bank explores how the increased focus on ESG issues can affect asset prices in a recent report. Its conclusions provide a nuanced picture of the effect of ESG integration.
If you are curious to find out how European investors can benefit from an increase in the ESG trend on the other side of the Atlantic, have a look at this sneak peek from our upcoming ESG Integration Case Book with this interview of Rockefeller Asset Management. Also in the US, Pfizer issued a second Covid-19 bond, set to yield 53 bps above Treasuries following initial price thoughts of around 75 bps.
Picture by Attentie Attentie on Unsplash (detail)