Responsible Investing: An Introduction to Environmental, Social, and Governance Investments

Cover
Title
Copyright
Contents
List of figures
List of tables
About the authors
List of contributors
Preface
Acknowledgments
1 Introduction
	1.1 Assumptions for this textbook
	Learning objectives
	1.2 Terminology
	1.3 Useful features for students
	Discussion questions
2 A historical survey of ESG investing
	Learning objectives
	2.1 Progression of investing theories: neo-classical economics encounters human nature
	2.2 Socially responsible investing’s historical beginnings: religious and corporate development (1800s–1950s)
	2.3 Development era: key milestones in the development of SRI investing (1950s–1990s)
	Case study 2A: Pilgrims Fund Board
	2.4 The modern era: 1990s–today
	Case study 2B: African Investing for Impact Barometer (2016)
	Learning perspective 1: handprinting: driving positive impacts
	Discussion questions
3 The development of ESG risk and the ESG rating system
	Learning objectives
	3.1 Introduction to ESG risks
	3.2 Policy risk
	Case study 3A: ATP
	Case study 3B: ESG risk for an institutional investor
	Case study 3C: gender equality and ESG investing: the Boston Common approach
	3.3 Headline risk
	Case study 3D: Mercy Health and exclusion-based ESG investing
	3.4 Performance risk
	3.5 Introduction to risk premia
	3.6 ESG identification and the ESG rating system
	Case study 3E: MSCI ESG ratings
	Case study 3F: Sustainalytics
	Case study 3G: Interfaith Center on Corporate Responsibility
	3.7 The impact of ESG risk on portfolio management
	Case study 3H: Brunel Pension Partnership
	Discussion questions
4 Common methods for incorporating ESG investments into portfolio management
	Learning objectives
	4.1 Exclusion-based ESG investing
	Case study 4A: Schroders Asset Management
	4.2 Integration-based ESG investing
	Case study 4B: ESG integration at J.P. Morgan Asset Management
	4.3 Impact-based ESG investing
	Case study 4C: impact investing at JANA Partners
	4.4 Engagement-based ESG investing
	Case study 4D: Wellington Asset Management
	Case study 4E: CIEPP and engagement through proxy voting
	Learning perspective 2: ESG proxy voting
	Discussion questions
5 The current role of ESG investing in portfolio management
	Learning objectives
	Case study 5A: SASB
	5.1 ESG investing in developed markets
	Case study 5B: Breckinridge Capital Advisors
	5.2 ESG investing in emerging markets
	Case study 5C: hot topic: fossil fuel free (FFF) investment
	Case study 5D: SRI investing within hedge funds
	Learning perspective 3: MIT Sloan
	Discussion questions
6 The impact of common investment theories on ESG investment trends
	Learning objectives
	6.1 Shareholder theory vs. stakeholder theory
	Case study 6A: Dodge v. Ford Motor Co. (Judicial Foundation for Shareholder Theory)
	6.2 Material information vs. non-material information
	Case study 6B: Securities and Exchange Commission 17 CFR PARTS 211, 231 and 241 [Release Nos. 33–9106; 34–61469; FR-82] Commission guidance regarding disclosure related to climate change
	6.3 Resource-based view vs. Porter’s five forces model
	6.4 Universal owner theory
	Learning perspective 4: Sustainable Development Goals
	Discussion questions
7 Common investor concerns regarding ESG investment strategies
	Learning objectives
	7.1 Return concerns
	Case study 7A: passively customized ESG indices by Aperio
	7.2 Policy concerns
	Case study: 7B ESG investing – key trends and a roadmap for institutional implementation
	7.3 Information concerns
	7.4 Regional concerns
	Case study 7C: ESG integration in markets and asset classes
	Learning perspective 5: sustainability and financial performance
	Discussion questions
8 Commonly held ESG views and practical considerations
	Learning objectives
	8.1 Qualitative vs. quantitative models
	8.2 Environmentally focused investing
	Case study 8A: GreenFaith
	Case study 8B: KBI Global Investors
	Case study 8C: Varma Pension Plan
	8.3 Socially focused investing
	8.4 Governance-focused investing
	Learning perspective 6: the future of capitalism is feminine
	Discussion questions
9 Methods for modeling risk and return for traditional investments
	Learning objectives
	9.1 Fundamental analysis
	Case study 9A: integrating ESG in DCF valuation: AllianceBernstein’s Global Core Equity
	9.2 Quantitative analysis
	Case study 9B: eight oil, gas, and coal companies
	9.3 Development of common method of risk and return
	Case study 9C: integrating ESG at Candriam Investors Group
	Learning perspective 7: ESG and investment risk
	Discussion questions
Conclusion
Index