At a recent Camradata roundtable, experts discussed how an attitude change among institutional investors over the past five years is driving momentum in sustainable investing.
David Wheeler, Portfolio manager – sustainable climate solutions; senior research analyst – sustainable thematic equities, AllianceBernstein
Mark Irish, Deputy head of ESG consulting, Isio
Sarah Bratton Hughes, Senior vice president, head of ESG & sustainable investing equities, American Century Investments
Amandeep Shihn, Head of sustainable investment manager research, WTW
Alex Quant, Investment consultant and head of ESG research, XPS Pensions Group
Robin Ellison, Chairman, Cambridge Colleges’ Federated Pension Scheme
Mark Whitehead, Head of sustainable global equities, Sanlam Investments
Sustainable equity investing has gone from fringe and niche to fully mainstream over the past few years. Inflows hit an all-time high amid the pandemic as investors reflected on the implications of their capital allocations.
At our sustainable investment roundtable on 7 July 2022 in London, Amandeep Shihn, head of sustainable investment manager research at WTW, said there has been a general increase in allocation over the last five years or so. But where that demand comes from varies significantly, and the products investors are seeking has changed too.
Shihn noted the “boom” in the DC pensions market for various ranges of ESG self-select funds, typically. Yet he also said an increasing number of DB pension funds were trying to become more sustainable within their remit and budgets. He said many were also looking more towards employing quant or smart beta strategies for this exposure where tracking errors and risk exposures could be controlled or optimised.
He noted a large increase in allocation to climate funds in the past few years.