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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
Climate change, cybersecurity, technological advancements and demographic changes were altering the investment management landscape before COVID-19. Learn what key trends our team is tracking in 2021.
April 2021
By investing with the intention of helping to advance the Sustainable Development Goals, you can play a critical role in creating a more inclusive society.
November 2019
A successful ESG integration strategy relies on 10 key steps.
October 2020
Focusing on quality has historically led us to companies with strong financial and ESG characteristics.
June 2020
A strategy or emphasis on environmental, social and governance factors ("ESG") may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have an ESG investment focus. A portfolio's ESG investment focus may also result in the portfolio investing in securities or industry sectors that perform differently or maintain a different risk profile than the market generally or compared to underlying holdings that are not screened for ESG standards.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
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.