Practically addressing ESG: investment insights

As our Investment Conference 2021 explored, environmental, social and governance (ESG) has shot up to the top of trustees agendas in recent years and the asset management industry has taken note.

Our ESG session began with Investment Actuary Hugo Gravell exploring a case study of a DC pension scheme seeking to limit exposure to fossil fuels within their passive equity allocation. The scheme ultimately invested in a climate-aware passive fund managed by Northern Trust. Valeria Dinershteyn, Senior Sustainability Investment Strategist at Northern Trust, joined the session to explore the fund’s characteristics and portfolio construction process.

We then moved onto the area of impact investment. Along with its impact on the elderly, Covid-19 has highlighted the devastating effect of high density living and poverty within the UK. Additional and improved, social infrastructure is needed to help address this.

Senior Investment Consultant Pete Smith was joined on the panel by Stuart Fiertz, CIO and co-founder of Cheyne Capital, and Nareser Osei, Councillor and Chair of the Pensions Committee at London Borough of Newham, to discuss developments in impact real estate investment and the opportunities created by the supply and demand characteristic in the housing space.

Our final speaker looked further at the ‘S’ within ESG. We can all think of companies who have displayed exemplary behaviours during the current crisis, and likewise those that have not. With social factors impacting on 12 of the United Nation’s Sustainable Development Goals, Navindu Katugampola, Head of Sustainable Investment in Fixed Income and Liquidity at Morgan Stanley, discussed what these mean in practice, and how he identifies the priority social themes impacting fixed income investments.