White Paper

What to Look for on the Road to ESG

David Schofield President, International Division
Adam Craig, CFA Head of Consultant Relations
Richard Yasenchak, CFA Head of Client Portfolio Management

Key Ideas

  • The steady media surrounding environmental, social and governance (ESG) investing might make the most skeptical investors wonder if they’ve been too dismissive. ESG investing is not sunshine and rainbows, but it has come a very long way.
  • For investors who are agents on behalf of beneficiaries or clients, deciding to engage in ESG investing is a serious question and that becomes especially clear when you start looking at ESG implementation. It’s often a more nuanced effort than many investors expect.
  • ESG is not a single asset class, factor or strategy. And it’s definitely not the same for every asset owner, or for that matter, every asset manager. Investors need an implementation framework to help them consider potential synergies of ESG investing and navigate its complexities.
  • In this paper, we attempt to provide an objective, three-step roadmap that helps you establish ESG investing goals, uncover managers and strategies aligned with those goals, and measure the outcomes that you expect.

ESG investing has become big business. As we pointed out in Invest in the ABC’s of ESG, over a quarter of all professionally managed assets around the world are in ESG strategies. Yet, regional differences exist. European investors are keen to consider ESG criteria; conversely, U.S. investors are likely to take a more measured approach to ESG, influenced by regulatory guidance.