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By Guillaume Mascotto - March 2019
We saw significant momentum in the ESG space during 2018. Asset managers launched new or repurposed strategies ranging from those designed to integrate environmental, social and governance issues more broadly into the investment process to screening strategies that exclude so-called “vice” industries (e.g., firearms, coal mining) and overweight “good” industries (e.g., renewable energy, clean tech) in client portfolios. We also noted a variety of new investment vehicles, such as ETFs and impact-related thematic products.
Globally, asset owners have increased their focus on allocating capital toward ESG-related investments. Growing concern for stranded fossil fuel assets and water stress generated particular interest in investment solutions that address climate change risks.
Issuers have also started placing more emphasis on ESG disclosure. They have stepped up organizational transparency around ESG-related risk management practices and business ethics controls to address growing investor concerns, especially after a series of scandals resulted in adverse impacts on market valuations and credit spreads.
Notes from the ESG Desk
Guillaume Mascotto, head of ESG and Investment Stewardship, discusses the importance of integrating ESG disclosures and company fundamentals when evaluating an issuer's ability to manage risk or capitalize upon an opportunity.
Learn why we believe investors may achieve alpha with impact without compromising solid returns.
Incorporating ESG factors into portfolios can be challenging because of differing terminology, rating methodologies and disclosure standards.
July 13, 2018
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The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
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