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EY survey: majority of institutional investors considering sustainability

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Almost nine out of 10 institutional investors say that non-financial performance information plays a pivotal role in at least some of their investments, according to a new report from consultancy firm EY. However, many are relying on personal judgement rather than having a process in place.

EY’s global survey questioned 163 institutional investors, over half of which have over $10 billion (£5.9bn) in equity assets under management. They were asked about their current investment practices and future needs, and the results showed that 89% considered non-financial information when making decisions.

The trend for incorporating environmental, social and governance (ESG) performance in analysing risks and opportunities has been growing in recent years. Assessing the long-term sustainability of a company you invest in can allow greater returns and stability and the EY report suggests that institutional investors have recognised and embraced this.

Interestingly, the survey reveals that ESG factors take a more prominent role in developing nations. Some 43% of emerging market respondents said non-financial information was “essential” for minimising risk. This compares to only 29% within developed markets.

EY explained this is potentially connected to the fact that the landscape in emerging markets shifts faster as they are developing and growing. As a result, how quickly companies can adapt is critical.

Juan Costa Climent, EY’s global leader of climate change and sustainability services, said, “The emergence of integrated reporting, and a widening appreciation of the risks and opportunities posed by externalities, creates a significant opportunity for organisations that can better inform investors of the non-financial risks and opportunities that their business faces.”

The willingness of investors to incorporate ESG issues is being hampered by lack of knowledge and access to data. The report says that investors are struggling to find ways to meaningfully compare the data and understand which issues are most material to their sustainable growth. Many are also finding it difficult to draw quantifiable links between financial and non-financial performance.

Only a third of respondents have a structured evaluation or process in place for evaluating non-financial disclosure. This means that two-thirds of investors either don’t evaluate non-financial disclosure or rely on their own personal judgement to assess environmental and social data.

Despite the challenges, investors are making the effort to find the information, even if companies are not providing it.

Matthew Bell, EY Australia climate change and sustainability services partner, commented, “What investors are telling us is that they’re using non-financial information to inform their decision making – whether or not the companies are providing it themselves.

“They’ve also identified weaknesses in current reporting, and so companies now need to consider a more structured approach.”

EY called on companies to invest in reporting in order to unlock the value created by being transparent on ESG factors and to highlight what is material to the organisation’s performance.

Bell concluded, “It is no good saying that investors aren’t asking for this sort of information. They’re finding ways of getting this data and they are assessing companies on it, so organisations need to take back the initiative. Companies need to act now or be penalised.”

Photo: Krappweis via Freeimages

Further reading:

Fiduciary duty: are your investments for the future?

IPCC findings demand investment in a sustainable future, say investors

Impact investment: ESG practice increase risk-adjusted returns in the long-term

F&C: responsible investment ‘continues to gather momentum’

Responsible investment is ‘an inevitable movement in society’

Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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How to make a sustainable living out of Forex Trading?

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sustainable forex trading
Shutterstock Licensed Photo - By Robert Kneschke | https://www.shutterstock.com/g/robertkneschke

There are two different types of forex trading in general: the profitable one and the not so profitable one. Everyone wants good profits at the end of the day, but unfortunately a good number of traders are burdened with the huge losses at the end of their forex careers. Many newbies run the other way around when they hear about forex trading due to heavy losses in their initial period. Of course, you would have heard about all those success stories, in your friends’ circle or on the internet. However, if you are looking forward to replicate those success stories, you need get yourself ready before that.

In this article, we will discuss the six essential skills that are needed to earn some profits from trading foreign currencies and make a sustainable living out of it.

1. Limit your risk ceiling

When you start with forex, you should try to define limits. Try to create a balanced scorecard that defines your personality with regards to various parameters such as your strengths, weaknesses, behaviors, and ability to take risks. It is essential that you list your financial goals before you start with forex trading.

2. Learn about leverage ratio and account type

When you start, brokers will suggest different forex trading accounts that might take you for a whirl if you aren’t prepared. Each forex trading account has its own pros and cons. It is essential that you engage with your broker to create a mini trading account so that you will be able to warm up on your forex trading skills in a low risk environment.

3. Start small

While starting out, some investors rush to have multiple currency pairs without doing proper research on them beforehand. It is very important have you understand the nature and volatility of a currency before you start trading a pair. Every single foreign currency is like a market onto itself. It is therefore important that you take the time to study about the country before forming pairs to understand the volatility of the currency. By using forex trading platforms such as ETX Capital, you can take informed decisions easily.

4. Learn to control emotions

A forex trader should never take any decisions on the spur of the moment based on emotions and should be as rational as he can. Controlling your impulses is the key to becoming a great forex trader.

5. Automate your processes

I am not suggesting you to rely completely on forex robots and trade copiers, but make use of the latest automation tech to execute transactions faster than ever before. Make use of automation features such as stop loss, price options etc. to make the most out of the exciting opportunities.

6. Keep it simple.

Not everyone can be a genius economist, mathematician and a trader, bundled into one. Forex trading is not a complex subject, you only need to arm yourself with positive thinking, and set yourself clear and realistic goals.

Conclusion

I hope this article was useful for you to learn about the key reasons why online forex trading is a good investment and how you can earn money through it. If you have any doubts with regards to this, let us know through the comments and we will be glad to help you out. If you have any suggestions regarding how we can improve the article, let us know them through the comments as well for us to improve.

Though it’s a reliable source of income, you will have to educate yourself properly before you start investing. It is important that you take the time to understand why things are the way they are before you jump all in and start making your first big bucks. All the best for your future ventures and keep coming for more interesting and useful articles.

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