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Adrian Nathaniel
MSCI has published a new report, “2018 ESG Trends to Watch,” which explores five major ESG trends that will affect the financial markets throughout this year. A myriad of challenges, including policy, technological and climatic changes, currently face companies, asset managers and investors alike. According to the report, 2018 will see the following trends: 1. SIFTING FOR MANAGEMENT QUALITY IN EMERGING MARKETS Picking good companies in which to invest can be a challenge in and of itself. But, when you add into the mix companies that are located in complex and opaque markets, the challenge to global investors is doubled. In 2018, it is expected that investors will increasingly use ESG signals to sift for quality in management and identify companies that are able to rise above their country's challenges. 2 FIRST STEPS IN SCENARIO TESTING CLIMATE CHANGE Each investor would do well to ask themselves the question "How resilient is your portfolio to different climate scenarios?" Investors in 2018 are expected to expand their view of portfolio climate risk from company carbon footprint to macro exposures across asset classes. 3. ACCELERATION OF ESG INTO FIXED INCOME INVESTING The ESG fixed interest space is still very much under-developed and as investors seek to balance their exposure to risk, the report anticipates that investors will aim to align their ESG frameworks across all asset classes and, in particular, the more defensive asset classes of fixed interest. This demand will drive growth in the number of ESG Fixed interest products available. 4. LOOKING BEYOND SUSTAINABILITY DISCLOSURE Companies have historically wanted to satisfy their investors' demands for transparency, but at the same time want to control their corporate narrative. Although voluntary disclosure provides valuable information to investors, the picture it presents of a company's ESG risks is limited. As a result, investors are going to seek a broad range of data services that can balance the corporate narrative and give a better understanding of the risk faced by portfolio companies of the ESG risk landscape. 5. THE YEAR OF THE HUMAN As artificial intelligence takes over tasks traditionally performed by humans, work tasks are redefined to require a higher skill set. Therfore, investors are looking to invest in quality talent at an increasing pace. Workforce data is difficult to find, but evidence suggests companies that have strong human capital showed superior growth compared with peers within the same industry. Investors can make simple comparisons using very basic metrics to provide valuable insights into the value a company places on its human talent. Comments are closed.
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As ethical financial advisors, we commit to building respectful relationships with Indigenous communities, working towards economic empowerment and self-determination, and supporting the financial well-being of all Australians and New Zealanders. We recognise that ethical financial advice creates positive change and contributes to a sustainable future, and we are committed to using our skills and expertise to make a difference.
The contents of this website are intended as general advice only. The information provided by the Ethical Advisers Co-operative do not account for any individual’s personal objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. The Ethical Advisers Co-operative recommends all users obtain their own independent professional advice from an appropriately qualified financial adviser before making any decision relating to their particular requirements or circumstances. Investing in, or switching between investments or superannuation funds may have unintended financial consequences.
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The Ethical Advisers' Co-op acknowledge the Traditional Custodians of the lands on which we work and live, the Aboriginal and Torres Straight Islander people of Australia, and pay our respect to the Elders past, present and emerging. We recognise and respect their cultural heritage, beliefs and relationship with the land and waters, and recognise their role in caring for and maintaining the land over thousands of years. We also extend that respect to other First Nations. We see reconciliation as a fundamental responsibility for The Ethical Advisers' Co-op and we are committed to advancing reconciliation with Australia’s First Peoples and engaging with their concerns.
We acknowledge and pay our respects to Māori as the tangata whenua the indigenous people of Aoteroa (New Zealand) and their ancestors who have cared for the whenua (land), its forests, rivers, and mountains for generations. We recognise their continuing connection and contribution to the whenua, and as Treaty of Waitangi partners and we are committed to building respectful relationships with Māori communities and to working towards a more just and equitable society.
As ethical financial advisors, we commit to building respectful relationships with Indigenous communities, working towards economic empowerment and self-determination, and supporting the financial well-being of all Australians and New Zealanders. We recognise that ethical financial advice creates positive change and contributes to a sustainable future, and we are committed to using our skills and expertise to make a difference.
The contents of this website are intended as general advice only. The information provided by the Ethical Advisers Co-operative do not account for any individual’s personal objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. The Ethical Advisers Co-operative recommends all users obtain their own independent professional advice from an appropriately qualified financial adviser before making any decision relating to their particular requirements or circumstances. Investing in, or switching between investments or superannuation funds may have unintended financial consequences.
The survey results, and all information contained in this website including all documents, consider only the ethics of each fund and do not include any analysis of fees, performance or financial suitability. The ethical score is subjective and benchmarked against each adviser’s average ethical client. Your ethics may differ. We recommend you speak to an experienced ethical financial adviser for personalised advice before making any decisions. The information provided by the Ethical Advisers Co-operative does not constitute financial advice. The information is general in nature and is presented in order to inform people motivated by ethical, environmental or social concerns.
Privacy Policy