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Alternative Market Briefing

A new report offers due diligence framework for sustainable investing

Thursday, January 30, 2020

Bailey McCann, Opalesque New York:

A new report from the Money Management Institute (MMI) and The Investment Integration Project (TIIP) in cooperation with Thornburg Investment Management offers a due diligence framework for sustainable investments. The report is designed to help investment consultants and investors compare and contrast sustainable investment strategies which can differ significantly manager to manager.

The due diligence framework is focused on equities strategies and doesn't offer questions for sustainability strategies that rely on other asset classes. The report authors have also included a topography of products and strategies that are typically included under the umbrella of sustainable investing in equities.

According to the data, there are four types of sustainable investment managers:

  • Financially-driven managers that incorporate sustainability factors into security valuation and portfolio construction to mitigate related risks, pursue related rewards, and enhance value;

  • Client-driven managers that respond to client requests to create separate accounts that incorporate specific sustainability considerations;

  • Manager-driven managers that incorporate sustainability considerations into their products or services to attract clients with social and environmental interests; and

  • Impact- or system change-driven managers that pursue sustainability impact or system-change goals along with financial targets......................

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