Hancock Natural Resource Group: Investing Beyond TodayHNRG is one of the world’s largest natural resource managers for institutional investors.
HNRG occupies a unique position as a steward of assets and land: find out how they are using this position to influence positive sustainability.
Redefining banking for a better future - Bank of the WestSustainable growth in the age of climate change
Bank of the West is working for a better future. Find out how Bank of the West is bringing sustainability and gender equality to finance.
Building synergy: Vermilion Energy Inc. creates geothermal energy from traditional oil productionShared value principles boost economic and social capacity
An innovative exchange between tomato greenhouses and oil production demonstrates how partnerships can play a critical role in the energy transition.
Konica Minolta: Digital Responsibility for a sustainable societyKonica Minolta strives for economic and social value through innovations. It includes how digitalisation can be done in a more sustainable way or to use digitisation for sustainable solutions.
Our vision for sustainabilitySuccessful business must act responsibly
Taking action on climate change is a priority. Legal & General challenge the companies they invest in to take carbon reduction seriously and contribute to a climate positive future.
The Panasonic Approach To SustainabilityPanasonic’s view of sustainability is deeply rooted in its management philosophy, which has remained unchanged for the last 100 years. As such, it is reflected in the principles laid down by the founder, Konosuke Matsushita, who called for the company to “make contributions to the progress of society and the well-being of people through our business activities.” As the company proceeds with its next 100 years, this spirit is still very much alive, as expressed in Panasonic’s corporate slogan, “A Better Life, A Better World,” which was established in 2013.
Siemens: Advancing technologies to serve societyWith a 172-year history, thinking and acting in the interest of future generations is part of our company’s DNA. Meeting the needs of the present without compromising the ability of future generations to meet theirs can only be accomplished by adopting long-term thinking and creating the foundations for sustainable development.
Our understanding of sustainability is fully based on our company values – responsible, excellent, innovative.
How can the legal sector drive sustainability?The rule of law is central to stable society, and driving global sustainability
Freshfields Bruckhaus Deringer LLP, tracing its history to 1743, is one of the most prestigious multinational law firms in the world. How are they contributing to the SDGs? Find out more here: bloomberg.com/ad/tbd-media/50-sustainability--climate-leaders
Investing in a Sustainable Future
The transition to a more sustainable global economy presents both risks and opportunities to investors and asset managers alike. Though sustainable investing (SI) has become a buzz phrase in recent years, Pax World Funds has been investing in the risks and opportunities resulting from the transition to a more sustainable economy for nearly 50 years. In 2018, Pax World Funds was acquired by Impax Asset Management Group, allowing both firms to expand their ESG investing capabilities.
ESG investing involves more than the responsible allocation of capital — engagement with the companies in which they invest helps the firm drive the adoption of sustainable practices while also contributing to economic growth in a responsible way.
From petitioning the SEC in 2007 for guidance on climate change-related risks to voting on shareholder resolutions that ask companies to report their emissions, Impax goes beyond paying lip service to sustainability and takes concrete actions. The firm introduced an environmental solutions fund — the Pax Global Environmental Markets Fund; signed the Montreal Pledge; established below‑benchmark emissions caps for its Smart Beta funds; made nine of its 11 Pax funds fossil fuel free; made the firm’s own operations carbon-neutral; and incorporated a SmartCarbon™ approach into three Pax funds. SmartCarbon™ is a proprietary, risk-based investment approach for managing exposure to companies with fossil fuel reserves on their balance sheets.
Julie Gorte, Senior Vice President for Sustainable Investing, explains why the company has prioritized sustainability for some time: ‘If we proceed on the path that we are on now — which is going to lead to something around four or five degrees of warming — we will suffer a catastrophe with many facets, one of which is financial. The estimates of the financial and economic losses due to climate change are all quite high — anywhere from two to 20 percent of GDP in perpetuity by 2100. That’s bound to affect financial markets.’
Building on its rich heritage of responsible investing, the firm quantifies the extent to which the Pax Global Environmental Markets Fund delivers impacts that constitute positive action on climate change.
As President Joe Keefe acknowledges, younger investors are focused on allocating their capital to companies they believe are confronting the climate challenge, and there is now an inherent reputational risk — to go along with the physical and financial risks — to brands that fail to operate sustainably.
‘Every company we invest in goes through what we call an A-list introduction,’ says Hubert Aarts, a Portfolio Manager of the Pax Global Environmental Markets Fund. ‘We look at the quality of the management, the quality of the product, the business model and, of course, the ESG (environmental, social and governance) criteria.’
With many facets, one of which is financial
Scrutinising ESG factors allows the firm to target areas of the economy that are providing solutions to environmental problems, identify risks related to environmental and social challenges and foster engagement between organizations on these issues.
While Impax is encouraged by the progress being made on sustainability within companies in the private sector, driven by their own engagement as well as evolving consumer expectations, it is clear that where governments are concerned, there is still potential for huge strides to be made.
‘What we really need from governments with regards to climate change,’ says Co-Head of Listed Equities Bruce Jenkyn Jones, ‘is a consistent policy and regulations across the world to really encourage this transition to a lower carbon economy.’
As the industry evolves, companies and governments alike will become more sophisticated and diligent in their approaches to climate change, an evolution Impax is helping to drive through sustainable investments and engagement.