- December 1, 2019: Vol. 31, Number 11

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Greening up: Some value-added investors find an advantage in ESG

by Kali Persall

As socially responsible investing evolves, investment managers are increasingly looking at returns through a more holistic lens, padding their portfolios with assets that are more congruent with their values.

Given the mobility in the movement, the market has seen a significant surge in managers that are keen on greening up. About 42 percent of U.S. institutional investors have incorporated environmental, social and governance (ESG) factors into their investment decision-making process, according to Callan’s seventh annual ESG Survey. GRESB, an ESG benchmarking group launched by a handful of large pension funds in 2009, also found more than 90 percent of participants benchmarked in 2019 have multiple ESG objectives that are fully integrated into their business strategies. Currently, GRESB participants total 1,005 private equity funds and listed real estate firms spanning 64 countries, representing $4.1 trillion in gross assets.

Value-added challenges

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