One key message from a panel of ESG investor experts from Legal & General, Hermes and the European Leveraged Finance Association during NatWest’s “ESG Reporting and Disclosure” webinar as part of its “What ESG investors want” series, which aims to offer guidance to corporates on their journey to becoming more sustainable businesses.
Sabrina Fox, CEO of the European Leveraged Finance Association (ELFA), Mitch Reznick, Head of Research and Sustainable Fixed Income at Hermes Investment and John Ryan, Portfolio Manager at Legal & General agreed with host Dr Arthur Krebbers, Head of Sustainable Finance Corporates at NatWest Markets, that “the comprehensiveness of ESG data is not yet there”. Rather, investors are seeing a bifurcated quality of data: larger, public firms are further advanced, while for many smaller companies it’s still early days with regards to identifying their ESG risks and opportunities and distinguishing between non-material and material risks.
However, there’s visible progress and commitment: Sabrina Fox reported that they have seen in recent ESG workshops that companies of any size and in every sector are proactively seeking the dialogue with investors about ESG and are looking for guidance from organisations such as the ELFA, while Mitch Reznick pointed out that companies that can combine their ESG narrative with business success (such as cost saving or added revenues through ESG) are conveying the most powerful story to investors.
The experts also discussed their exclusion strategies, with new sectors - such as gaming in some instances and tax haven companies - being added to the list of more long-standing exclusions such as weapon manufacturers, tobacco, land mining and fossil fuel companies, highlighting the fact that portfolio managers as well as their retail clients are fast concentrating on value based investing. To hear the experts’ views on those topics in detail as well as learn how they judge different ESG financial instruments such as Green Bonds and Sustainability-linked products, please follow this link to watch the full webinar.
Previous episodes in this series include:
“Sustainability strategies”: Sustainability strategies are multi-faceted and dynamic. Amidst a menu of options, what do investors expect corporates to focus on? Experts from Insight IM, AllianceBernstein and Affirmative IM provide answers: WATCH.
“New sustainable debt structures”: The one-dimensional world of green bonds has made way to a plethora of new sustainable debt structural options. Should companies opt for transition, sustainable, KPI-linked or social debt issuances? Experts from Blackrock, Lord Abbett and Columbia Threadneedle are sharing their views: WATCH.
“SDG investing”: The UN Sustainable Development Goals (SDGs) are rapidly becoming the ‘lingua franca’ of ESG impact. How are the SDGs converted into investment decisions? And what does this mean for company reporting? Listen to experts from PIMCO, PRI and APG: WATCH.
“2021 trends”: 2020 has been a sustainability “wake up call” – a game changer for ESG analysis and investing. Will this momentum continue into 2021? What developments should be on companies’ radar? Hear what experts from Actiam, Franklin Templeton and La Francaise have to say: WATCH.
“Transition Finance”: Assessing environmental targets from high-carbon companies, and which debt instruments are most suitable for transition finance? Hear what our panel from Insight Investment, Deka and AB Global have to say: WATCH.