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Investors are increasingly seeking to design portfolios that achieve financial goals (return & risk) and have environmental and social impact. This session will look at how to assess the effect of ESG issues on macro economies and markets and how to engineer a scalable strategic asset allocation that delivers consistent financial performance and is aligned to the UN Sustainable Development Goals.
View Karen’s presentation slides here[vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Karen%20Karniol-Tambour%22%2C%22job_role%22%3A%22Head%20of%20investment%20research%2C%20Bridgewater%20Associates%20(United%20States)%22%2C%22content%22%3A%22Karen%20Karniol-Tambour%20is%20the%20Head%20of%20Investment%20Research%20at%20Bridgewater%20Associates%2C%20the%20world%E2%80%99s%20largest%20hedge%20fund%20with%20%24160%20billion%20in%20institutional%20investments.%20In%20this%20capacity%2C%20she%20oversees%20a%20team%20of%20over%20150%20investment%20professionals%20researching%20and%20building%20systematic%20strategies%20to%20trade%20global%20financial%20markets.%20Karen%20oversees%20Bridgewater%E2%80%99s%20systemized%20investment%20logic%20for%20trading%20fixed%20income%2C%20with%20a%20secondary%20responsibility%20for%20equities%2C%20and%20is%20a%20regular%20author%20of%20Bridgewater%E2%80%99s%20Daily%20Observations.%20She%20meets%20regularly%20with%20investors%20and%20policymakers%2C%20and%20represented%20Bridgewater%20at%20the%20World%20Economic%20Forum%20in%20Davos%20in%202017%20and%202018.%5CnKaren%20graduated%20from%20Princeton%20University%E2%80%99s%20Woodrow%20Wilson%20School%2C%20where%20she%20studied%20under%20Nobel%20Laureate%20Daniel%20Kahneman%20and%20was%20awarded%20the%20Gale%20F.%20Johnson%20Prize%20in%20Public%20Affairs.%20%20Born%20and%20raised%20in%20Israel%2C%20Karen%20has%20worked%20with%20nonprofit%20Seeds%20of%20Peace%20since%20she%20was%20a%20teenager%20and%20serves%20as%20member%20of%20its%20Global%20Leadership%20Council.%20Committed%20to%20enhancing%20women%E2%80%99s%20leadership%20in%20finance%2C%20Karen%20is%20an%20active%20angel%20investor%20focusing%20on%20technology%20startups%20led%20by%20women.%20She%20is%20a%20Council%20on%20Foreign%20Relations%20Corporate%20Leader%20and%20was%20included%20in%20Business%20Insider%E2%80%99s%20Rising%20Stars%20Under%2035%20in%20Asset%20Management%5Cn%22%2C%22image%22%3A%2233594%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fsaker-nusseibeh-cbe-6b15a85%2F%3ForiginalSubdomain%3Duk%22%7D%5D” title=”Speaker” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Amanda%20White%22%2C%22job_role%22%3A%22Director%2C%20institutional%20content%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22White%20is%20responsible%20for%20the%20content%20across%20all%20Conexus%20Financial%E2%80%99s%20institutional%20media%20and%20events.%20She%20is%20responsible%20for%20directing%20the%20bi-annual%20Fiduciary%20Investors%20Symposium%20which%20challenges%20global%20investors%20on%20investment%20best%20practice%20and%20aims%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts%2C%20as%20well%20as%20promote%20the%20long-term%20stability%20of%20markets%20and%20sustainable%20retirement%20incomes.%20She%20is%20the%20editor%20of%20conexust1f.flywheelstaging.com%2C%20the%20online%20news%20and%20analysis%20site%20for%20the%20world%E2%80%99s%20largest%20institutional%20investors.%20White%20has%20been%20an%20investment%20journalist%20for%20more%20than%2020%20years%20and%20has%20edited%20industry%20journals%20including%20Investment%20%26%20Technology%2C%20Investor%20Weekly%20and%20MasterFunds%20Quarterly.%20She%20was%20previously%20editorial%20director%20of%20InvestorInfo%20and%20has%20worked%20as%20a%20freelance%20journalist%20for%20the%20Australian%20Financial%20Review%2C%20CFO%2C%20Asset%20and%20Asia%20Asset%20Management.%20She%20has%20a%20Bachelor%20of%20Economics%20from%20Sydney%20University%20and%20a%20Master%20of%20Arts%20in%20Journalism%20from%20the%20University%20of%20Technology%2C%20Sydney.%20She%20was%20previously%20a%20columnist%20for%20the%20Canadian%20publication%2C%20Corporate%20Knights%2C%20which%20is%20distributed%20by%20the%20Globe%20and%20Mail%20and%20The%20Washington%20Post.%20White%20is%20currently%20a%20fellow%20in%20the%20Finance%20Leaders%20Fellowship%20at%20the%20Aspen%20Institute.%20The%20two-year%20program%20consists%20of%2022%20fellows%20and%20seeks%20to%20develop%20the%20next%20generation%20of%20responsible%2C%20community-spirited%20leaders%20in%20the%20global%20finance%20industry.%22%2C%22image%22%3A%2233531%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Famanda-white-101a7515%2F%3ForiginalSubdomain%3Dau%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]
It is increasingly obvious that it is not feasible to be an investor without thinking hard about issues of sustainability. It is impossible to map the expected future path of the world without considering the SDGs.
The biggest change in perspective required is the evolution from risk/return to risk/return/impact. We believe it is very practical and achievable for institutional investors to consider all three dimensions. There is no need to sacrifice return in order to meet impact targets.
Investors should build a diversified portfolio of sustainable assets, scalable to your whole portfolio. Assets should be chosen that further your goals.
The sustainability investment data ecosystem is growing rapidly. What we are doing today may be ten times better in a few years.
Net zero by 2050 could be a secondary goal to the SDGs, or it could be your only goal. You can then buy assets to build a portfolio to meet that goal.
‘In our minds a lot of investors are overly skewed to equities. In our view this is a huge mistake. It leaves you very naked if something unexpected happens.’
ESG factors are critical to generating alpha simply because ESG factors are critical to the world’s present and future.
We believe it is our duty as investors to raise awareness of where we can find investible opportunities aligned to specific SDGs and where we cannot. This will help maximise opportunities and help address gaps.
One of the most important, upcoming challenges at CalSTRS is how the fund should evaluate Chinese investments from a human capital and environmental standpoint, says Chris Ailman, chief investment officer at the giant pension fund.
For the economic recovery from the COVID-19 crisis to be durable and resilient, a return to ‘business as usual’ and environmentally destructive investment patterns and activities must be avoided.
Following the PRI’s The SDG investment case – which laid out why the SDGs are relevant to investors this report takes the next steps by outlining a prospective framework for action.
Federated Hermes Nick Spooner explores how climate breakdown will exacerbate infectious diseases, and the steps that companies, investors and governments need to take to mitigate the impacts of the climate crisis and future pandemics.
If an overly relaxed world has since slept through a series of environmental alarms, the coronavirus crisis may well be the wake-up call it needs to avert the worst climate change bear scenarios.
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