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July Newsletter - ESG in the Mainstream

Traditional fund houses are integrating ESG firm wide.

As responsible investing gains momentum, the world’s most influential asset managers are expanding the application of Environmental, Social, and Governance (ESG) principles as a strategic investment tool.

Asset managers, such as Blackrock and Wells Fargo, are about to launch their first-ever ESG funds for retirement savings plans, in validation of the remarkable growth in demand for responsible investment options. Vanguard is also actively expanding its sustainable investment offerings by launching ESG ETFs covering U.S. and international equities.

Boston-headquartered global asset managers are at the forefront of this trend. State Street Global incorporates ESG as a fundamental factor for analyzing investment opportunities. State Street fully integrates ESG criteria in the investment process as a risk mitigation strategy. Fidelity is blazing the trail by becoming the only firm to offer ESG index mutual funds across every major asset class with its Sustainability Bond Index Fund, Fidelity U.S. Sustainability Index, and Fidelity International Sustainability Index Fund.

The other Boston-based power house, Amundi Pioneer Asset Management has integrated ESG strategies since 1928 by using negative-screening processes. Recently, Amundi announced the expanded use of ESG considerations in two of its US mutual funds - the Pioneer Fund and Pioneer Classic Balanced Fund. Following the creation of Putnam’s Sustainable Investing team, the firm repositioned a $4.3 billion (as of the end of 2017) growth fund into the Sustainable Leaders Fund, which will invest in companies dedicated to sustainable practices. The Putnam Sustainable Future Fund, the firm's second dedicated sustainability fund, is a mid-cap fund focused on identifying companies that provide solutions for sustainable social, environmental, and economic development.

At Total Impact Boston, we will dig deeper into the many ways in which “traditional” fund houses are embedding ESG into risk management and portfolio construction, and ramping up their sustainable investment product lines. To hear from the likes of State Street and more, please register here.

 

July's newsletter also includes the following updates and articles