Dutch asset manager NN Investment Partners (NN IP) is collaborating with a unit of Yale University on an academic research programme that explores “whether and how the integration of ESG aspects in the investment process may improve risk/return of investment portfolios”.
The Yale Initiative on Sustainable Finance (YISF), part of the US university’s School of Management, said on its website that the new research stream proposed to address correlations between ESG integration and financial performance “from a range of fresh perspectives”.
This included testing potential correlations through analysing existing literature with advanced data analytics and “big data tools”, controlling for the type of sustainability practices and the types of investors – for example whether they were passive, active or “semi active”.
YISF also said it would “adopt a broader perspective by assessing financial performance as only one source of capital among others” and explore potential for new accounting frameworks for companies that better reflected sustainability performance and offered guidance to investors.
Diane Strauss, research director at the Yale unit, said: “Testing how ESG information influences financial returns is a critical question for the industry. We believe that rigorous academic research can provide independent and thoughtful insights necessary to move capital towards a more sustainable path.”
Jeroen Bos, head of specialised equity and responsible investing at NN IP, said: “In addition to our previous academic research on ESG, we are confident that through YISF’s research stream, we can further enrich our insights to the benefit of our clients and society.”
Sampension signs up to Climate Action 100+
Danish pension fund Sampension has joined Climate Action 100+, an international programme backed by investors with over $32trn (€28.2trn) in assets under management.
The initiative aims to ensure investors influence the world’s largest greenhouse gas emitters to commit to limiting their impact on climate change, in line with the Paris Agreement.
Two independent funds signed up alongside Sampension: the Architects Pension Fund and the Pension Fund for Agricultural Academics and Veterinarians.
Hasse Jørgensen, chief executive at Sampension, said the DKK290bn (€39bn) pension fund had intensified its focus on efforts to increase transparency in investment markets in relation to to climate risks.
The Climate Action 100+ project’s latest agreement was with mining company Glencore, one of the largest producers of thermal coal. Investors active under the banner of Climate Action 100+ have also led fruitful engagements with BP and Shell about the management of their carbon footprints.
NN IP, Robeco, Actiam adopt revised palm oil production standards
NN IP, Robeco and Actiam have announced their support for the transition to a sustainable palm oil industry by adopting the revised standards of the Roundtable on Sustainable Palm Oil (RSPO).
The RSPO has developed a set of environmental and social criteria companies must comply with in order to produce certifiably sustainable palm oil.
Its principles and criteria outline expectations of palm oil plantation owners, including no deforestation, no development on peatland and no exploitation of workers.
The investors said they believed that the principles and criteria were an important step forward in the pursuit of a sustainable palm oil industry.
However, Robeco, NN IP and Actiam all highlighted that there was still room for improvement in the sector, citing transparency and commitment of RSPO companies that still source palm oil fom non-RSPO members.
They said they would intensify their engagements with palm oil companies and the RSPO with the aim of improving the level of sustainability in the industry.
The RSPO engages with individual companies about their sustainable performance through various stages of the supply chain and how they deal with the smallholder producers that sell palm oil for processing.
Airlines’ emissions management under scrutiny
An asset owner-led climate change research initiative has turned its attention to the aviation sector, challenging airlines to set more ambitious targets to reduce flight emissions.
According to the Transition Pathway Initiative (TPI), which is backed by investors with over $13trn in assets under management, the airline sector accounts for 2% of global CO2 emissions and 12% of transport-related CO2 emissions.
Although many airlines had formally adopted industry targets to reduce their net emissions, the TPI said, this approach relied on carbon offsetting and it was unclear how much the airlines planned to reduce their own flight emissions.
Faith Ward, co-chair of the TPI and chief responsible investment officer at the Brunel Pension Partnership, said: “The aviation sector is doing the basics when it comes to carbon performance, but investors are urging them to take more significant steps as they judge which airlines are most likely to survive the turbulence of the transition to a low carbon economy.”
David Russell, head of responsible investment at the £64.5bn Universities Superannuation Scheme, added: “[TPI’s] analysis shows that while some in the sector are treating this issue strategically, others have some way to go.”
The assessment was carried out by the Grantham Research Institute on Climate Change and the Environment, a research centre at the London School of Economics and Political Science that is TPI’s academic partner.