Considering environmental, social and governance (ESG) factors when building portfolios is no longer a niche strategy. Indeed, it is rare to find an institutional investor who does not integrate some elements of sustainability into at least one of their strategies.
Investing to help achieve net zero, improve equality or conserve natural resources are now mainstream objectives and their importance among pension schemes is expected to grow…and rapidly. PwC believes that asset managers globally will have $33.9trn (£27.9trn) worth of ESGcompliant assets under management by 2026, up from $18.4trn (£15.1trn) in 2021.
The issue is that there is more to building a sustainable portfolio than investing in a wind farm. Then there is greenwashing and a lack of data to contend with. So how should institutional investors integrate ESG and sustainability into their portfolios?
To find out, portfolio institutional spoke to Annachiara Marcandalli, partner and European head of sustainability and impact at Cambridge Associates, who has been helping investors build sustainable portfolios for more than two decades.