{"id":348,"date":"2020-12-07T09:00:06","date_gmt":"2020-12-07T09:00:06","guid":{"rendered":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/?p=348"},"modified":"2021-05-04T09:30:22","modified_gmt":"2021-05-04T07:30:22","slug":"esg-investing-institutional-investors-and-active-ownership","status":"publish","type":"post","link":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/2020\/12\/07\/esg-investing-institutional-investors-and-active-ownership\/","title":{"rendered":"ESG investing, Institutional Investors, and Active Ownership"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">For many investors, the&nbsp;financial outcome of their investments is not their&nbsp;only&nbsp;objective.&nbsp;Some investors are also interested&nbsp;in&nbsp;the impact and role&nbsp;of&nbsp;their investments&nbsp;in&nbsp;promoting sustainability and responsible actions.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Environmental, Social and Governance&nbsp;(ESG)&nbsp;investing is a term for&nbsp;investments aiming for&nbsp;long-term&nbsp;positive&nbsp;impact on&nbsp;society&nbsp;and the environment&nbsp;with positive&nbsp;financial&nbsp;returns.&nbsp;For instance, the world\u2019s largest asset manager BlackRock recently stated in their&nbsp;<em>2020&nbsp;Letter to Our Clients<\/em>&nbsp;that \u201csustainability should be our new standard for investing\u201d.&nbsp;They see especially climate risk as a transition and investment risk for investors, and for their portfolios. Sustainability-oriented portfolios can provide higher risk-adjusted returns. On efficient markets, returns are viewed as compensation for taking on risks, and therefore sustainability-oriented investing should not yield excess returns.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Bank of Finland (BoF) has had responsible investment practices in place for several years. It takes into account the risks and sustainability aspects related to investment activities. By signing the UN-backed Principles for Responsible Investment (PRI) in December 2019, BoF committed to incorporating environmental and social, and corporate governance issues into its investment decisions and ownership policies and practices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">One might ask, is ESG investing about achieving higher risk-adjusted returns? Can responsible investing work to mitigate risks during poor economic times for investors, i.e., work as a kind of insurance against bad times? How does the BoF actually implement responsible investment strategy?<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"684\" src=\"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2020\/12\/ESGinvesting-1024x684.jpg\" alt=\"\" class=\"wp-image-344\" srcset=\"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2020\/12\/ESGinvesting-1024x684.jpg 1024w, https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2020\/12\/ESGinvesting-300x200.jpg 300w, https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2020\/12\/ESGinvesting-768x513.jpg 768w, https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2020\/12\/ESGinvesting-850x567.jpg 850w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Find out answers to these and other timely questions by listening <strong>Niclas Meyer<\/strong>, post-doctoral researcher at Hanken with <strong>Anna Hyrske<\/strong>, Principal Responsibility Specialist at Asset Management Department, Bank of Finland <a href=\"https:\/\/bit.ly\/3lRK0hk\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"podcast (opens in a new tab)\">podcast<\/a> on ESG investing! <\/p>\n\n\n\n<figure class=\"wp-block-embed-spotify wp-block-embed is-type-rich is-provider-spotify wp-embed-aspect-21-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"Spotify Embed: Sustainability Unwrapped: ESG investing, Institutional Investors, and Active Ownership\" style=\"border-radius: 12px\" width=\"100%\" height=\"152\" frameborder=\"0\" allowfullscreen allow=\"autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture\" loading=\"lazy\" src=\"https:\/\/open.spotify.com\/embed\/episode\/1WvLKOe3FmAn4P2DgZZO8y?si=TDsKz4xaQBqvSBx3JaoRsA&amp;utm_source=oembed\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<div class=\"wp-block-file\"><a href=\"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2021\/05\/e11_esg.pdf\">Episode 11 transcript<\/a><a href=\"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-content\/uploads\/sites\/11\/2021\/05\/e11_esg.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">References:&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Niclas Meyer&#8217;s introduction to the topic<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"text-align:left\">Bank of Finland. Responsible Investment: <a rel=\"noreferrer noopener\" aria-label=\"https:\/\/www.suomenpankki.fi\/en\/bank-of-finland\/sustainability\/responsible-investment\/#:~:text=Responsible%20investment%20generally%20means%20the,governance%20issues%20in%20investment%20activities.&amp;text=The%20Bank%20of%20Finland%20also,covered%20bonds%20an (opens in a new tab)\" href=\"https:\/\/www.suomenpankki.fi\/en\/bank-of-finland\/sustainability\/responsible-investment\/#:~:text=Responsible%20investment%20generally%20means%20the,governance%20issues%20in%20investment%20activities.&amp;text=The%20Bank%20of%20Finland%20also,covered%20bonds%20an\" target=\"_blank\">https:\/\/www.suomenpankki.fi\/en\/bank-of-finland\/sustainability\/responsible-investment\/#:~:text=Responsible%20investment%20generally%20means%20the,governance%20issues%20in%20investment%20activities.&amp;text=The%20Bank%20of%20Finland%20also,covered%20bonds%20an<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Blackrock, Annual Letter (2020) <a href=\"https:\/\/www.blackrock.com\/corporate\/investor-%20%20relations\/blackrock-client-letter\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"https:\/\/www.blackrock.com\/corporate\/investor-relations\/blackrock-client-letter (opens in a new tab)\">https:\/\/www.blackrock.com\/corporate\/investor-relations\/blackrock-client-letter<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Dyck, A.,&nbsp;Lins, K., Roth, H., Wagner, H., 2019. Do institutional investors drive Corporate Social Responsibility? International evidence.&nbsp;<em>Journal of Financial Economics 131,<\/em>&nbsp;693-714.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Kr\u00fcger, P., Sautner, Z., Starks, L., 2020. The importance of climate risks for institutional investors.&nbsp;<em>The Review of Financial Studie<\/em><em>s 33 (3)<\/em>, 1067-1111.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To our Finnish speaking listeners! Find out also recently published book&nbsp;&#8220;Vastuullinen&nbsp;sijoittaja&#8221; (Responsible Investor) by:&nbsp;&nbsp;Hyrske, A.,&nbsp;L\u00f6nnroth, M.,&nbsp;Savilaakso, A.,&nbsp;Siev\u00e4nen, R. 2020.&nbsp;&nbsp;Kauppakamari.&nbsp;(Available only in Finnish).&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>For many investors, the&nbsp;financial outcome of their investments is not their&nbsp;only&nbsp;objective.&nbsp;Some investors are also interested&nbsp;in&nbsp;the impact and role&nbsp;of&nbsp;their investments&nbsp;in&nbsp;promoting sustainability and responsible actions.&nbsp;&nbsp; Environmental, Social and Governance&nbsp;(ESG)&nbsp;investing is a term for&nbsp;investments aiming for&nbsp;long-term&nbsp;positive&nbsp;impact on&nbsp;society&nbsp;and the environment&nbsp;with positive&nbsp;financial&nbsp;returns.&nbsp;For instance, the world\u2019s largest asset manager BlackRock recently stated in their&nbsp;2020&nbsp;Letter to Our Clients&nbsp;that \u201csustainability should be our [&hellip;]<\/p>\n","protected":false},"author":57,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[113,109,117,116,112,111],"tags":[74,70,73,72],"class_list":["post-348","post","type-post","status-publish","format-standard","hentry","category-climate-action","category-industry-innovation-and-infrastructure","category-partnerships-for-the-goals","category-peace-justice-and-strong-institutions","category-responsible-consumption-and-production","category-sustainable-cities-and-communities","tag-governance","tag-sdgs","tag-social","tag-sustainable-investing"],"_links":{"self":[{"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/posts\/348","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/comments?post=348"}],"version-history":[{"count":17,"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/posts\/348\/revisions"}],"predecessor-version":[{"id":668,"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/posts\/348\/revisions\/668"}],"wp:attachment":[{"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/media?parent=348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/categories?post=348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.hanken.fi\/sustainability-unwrapped\/wp-json\/wp\/v2\/tags?post=348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}