Talking Point  

Is ESG the future of active management?

  • Describe some of the issues facing ESG and active investing
  • Identify the demands faced by active managers
  • Describe some of the challenges with ESG investments
CPD
Approx.30min
Is ESG the future of active management?
Fund managers are taking advantage of soaring interest in sustainable investing
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ESG has come to dominate the investment sector to such an extent that many see it as forcing a structural shift in the investment landscape.

Fund managers are scrutinising their investments for the values they hold, which not so long ago would have been considered somewhat fringe, at the very least.

But not only that, fund managers are actively engaging with investee companies' executives, to ensure they are doing what they say they are doing, and are being held to the highest standards.

The biggest problem, however, is standardisation: investors have varying definitions of what ESG means to them, and one corporate activity in one context conforms to these principles while not in another context.

There is also the issue of greenwashing, whereby funds try to market themselves as being more ESG-focused than they may really be.

This report, part of Talking Point, aims to look at some of these issues, and the impact ESG is having on the fund management industry.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Last year, UK small cap equity sector, less than 40 per cent of funds outperformed, true of false?

  2. What will ESG exposure require from advisers?

  3. Andrew Bailey does not believe that a desire for passive investing and ethical investing can co-exist, true or false?

  4. What went wrong with ethical funds run by Aberdeen Standard and Premier Miton?

  5. Why is Tesla seen as a controversial ESG investment?

  6. Which of the following is NOT a problem for passive

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You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe some of the issues facing ESG and active investing
  • Identify the demands faced by active managers
  • Describe some of the challenges with ESG investments

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