Singapore Green Finance Centre’s Post

Does responsible investing affect financial and responsibility performance? Short answer: No and Yes!   Most research in socially responsible investing is about how it influences financial performance. However, hardly any study investigates how it affects responsibility. We investigate how different motives of responsible investors would affect investment portfolio design and, consequently, financial and non-financial performance of investments. To this extent, inspired by the study of Chatterji, Levine and Toffel in the Journal of Economics and Management Studies, we study financial, deontological, consequentialist, and expressive motivated responsible investors. The first seek to achieve financial outperformance by relying on ESG information. The second avoid investing in controversial issues. The third seek to influence the most sustainable firms. The fourth try to enhance their own social identity by investing responsibly. In line with the vast majority of the academic literature, we find that the specific motivation for socially responsible investing does not significantly affect financial performance. However, the motivation does have a substantial influence on the responsibility score of the portfolio. In particular, deontological portfolios underperform the universe of responsible portfolios regarding responsibility score. This might reflect the origin of responsibility scoring, where controversial firms usually invest more in responsibility than less controversial ones. The other portfolios all outperform the market portfolio in terms of their responsibility scores. This has important lessons for responsible investment funds: They will need to find out about the motives of their investors to modify portfolio design when investing responsibly. “One size for all” is no option when targeting responsible investors.   You can access your published article via this link: https://lnkd.in/e4B6ap7A Bert Scholtens and Fabian Willard (2024). One Size Does Not Fit All: Responsible Investor Motivation and Investment Performance. Corporate Social Responsibility and Environmental Management. DOI: 10.1002/csr.2905  

#PRI Responsible Investing, Recognition for Action and Stewardship Short List Awards 2024 Announcement. Principles for Responsible Investment Awards 2024 Shortlist: All shortlisted submissions are spotlighted below, having been selected by a panel of independent judges. There are five shortlisted projects in each category. The winners will be announced at PRI in October live in Toronto, along with two Special Awards (one in Emerging Markets and one in Private Markets) which will be selected from submissions in the five main categories. Innovation in Responsible Investment Strategy Bintang Capital Partners – BCP Asia Fund II: The world’s first B Corp propagator fund GENUI – Good entrepreneurship: Investing with entrepreneurs to create strong returns and positive impact ILX Fund – Innovative vehicle to deploy impact institutional capital in EMS Innocap – Investi: Accelerating innovation in sustainable finance through collaboration Quadria Capital Investment Management Pte. Ltd. – Responsible investment strategy System Stewardship Aqua Capital – Embedding sustainability within the investment cycle CCLA Investment Management – CCLA corporate mental health benchmark DWS Group – Submitted on behalf of the Energy Efficiency Financial Institutions Group (EEFIG): Ten years of policy engagement Summa Equity – Impact accounting to measure and manage impact for a more stakeholder-centred economy Trinetra Investment Management LLP – Beyond wages: Bridging informal and formal work in emerging markets Recognition for Action – Climate Equitix – Innovation tool to analyse portfolio-wide physical climate risk Federated Hermes Limited – Climate action Nordea Asset Management – Methane collaborative engagement SAIL Investments – High impact climate and natural capital Recognition for Action – Human Rights AkademikerPension – Integrating human rights in multi-asset class investment strategy BMO Global Asset Management – Respect and protect human and Indigenous Peoples’ rights: A focus on Canada First Sentier Investors – Investors against slavery and trafficking Asia Pacific (IAST APAC) Redwheel – The Greenwheel human rights toolkit for investors Swedbank Robur – Driving engagement on children’s rights Recognition for Action – Nature AXA Investment Managers IM Alts – Financing natural capital restoration and protection EcoEnterprises Fund – 25 years of biodiversity investing Groupe Caisse des Dépôts – Nature is future Gresham House – Habitat banks as a new infrastructure asset class Nuveen, a TIAA company – Nature stewardship initiative Stay tuned! Read the full list: https://lnkd.in/dnvPCibb

Imagine growing your wealth while also making a positive impact on the world. Socially responsible investing (SRI), or impact investing, allows you to achieve this by focusing on companies that prioritize environmental sustainability, social justice, and ethical business practices. What You Need to Know SRI involves investing in organizations that aim to make a positive societal and environmental impact while delivering financial returns. Common characteristics of socially responsible investments include: Emphasis on sustainability and renewable energy Commitment to diversity, labor rights, and workplace safety Transparent corporate governance Investing in companies that uphold these principles helps you build a diversified portfolio aligned with your values. Why SRI, and Why Now? The digital age has increased transparency and awareness of corporate practices and their impacts. This increased awareness has given many people a desire to align their investments with their personal values. Moreover, many socially responsible companies have shown strong financial performance, debunking the myth that ethical investing compromises returns. Ways to Incorporate SRI There are several ways to include SRI in your investment strategy. One common method is investing in mutual funds or exchange-traded funds (ETFs) that follow environmental, social, and governance (ESG) criteria. These funds provide diversification and have historically offered stable returns. Another option is community investments, which direct funds to projects that benefit underserved areas, such as affordable housing, small business support, and education programs. These investments promote economic growth and social equity. Build a Future You Can Feel Proud Of Are you interested in building a values-driven portfolio? We can work together to identify your priorities, explore investment options, and develop a strategy that matches your financial goals and ethical standards. Contact the office today if you’re interested in learning more. Exchange traded funds (ETFs) and mutual funds are sold only by prospectus. Investing in ETFs and mutual funds is subject to risk and potential loss of principal. ETFs incur trading and commission costs similar to stocks and frequent trading can negate the lower cost structure of an ETF. There is no assurance or certainty that any investment or strategy will be successful in meeting its objectives. Investors should consider the investment objectives, risks and charges, and expenses of the fund carefully before investing. The prospectus contains this and other important information about the fund. Contact your registered representative of the issuing company to obtain a prospectus, which should be read carefully before investing or sending money.

My two great loves--theory of change and investment management--have finally come together. The FCA think that some investment managers may be overstating their sustainability credentials, and that therefore they think that there should be more theories of change in sustainable finance--so that people have to explain how they are going to get the change that they claim. If you don't know what this is, and are afraid to ask me to explain in case you never escape--my colleagues Gurmeet Kaur and Flora Charatan have written a guide. https://lnkd.in/e5gCFSHg

My dreamer would have my earlier post's comment section happening at a gathering of finance changemakers where we finally and decisively tip the scales of Big Money in favor of the wellbeing of life on Earth.  (Might Gathering Of Tribes be that? It's soon and Evolutesix will be there...!) Eduardo Esparza could you elaborate on what you personally mean by systemic investing? I interpret financing systems change. If so, EIS* is a promising way to operationalize financial flows into regenerative business ecosystems**, tackling the biggest issues of our time while fairly sharing the wealth generated from it and the balance of power needed to achieve it. *: our acronym for ergodic investing strategies, pronounced "ice". **: I define as a portfolio+ of businesses. One that is diversified strategically either across broad industries with horizontal, operational synergies (i.e. Stratum 5-6 allocation, ecosystem-global level) or throughout entire circular value chains (i.e. Stratum 1-6 allocation, integrating Inner developmental through global ), or whatever creatively practical combinations are useful.  The "+" in portfolio+ is about the next level of integration in between businesses. In its "purest" form, entering into the solidaric finance solution offered by EIS, requires businesses and investors voluntarily entering into a high degree of interdependent fiduciary and governance terms and responsibilities. I am personally very excited for the applications of EIS funding business ecosystems to cool down the hot rates of early startup failure. The fractional profit and talent pooling feature of EIS empowers business ecosystems with the working capital they need to weather unpredictable storms. I would think forming part of a collaborative business ecosystem and gaining access to shared capital pools and materially increasing chances of success would be very attractive, especially so for risk-loving and visionary entrepreneurs and investors. What do you think? Elin Bergman Rebecca Kowalski FPFS, Sustainable Finance specialist Graham Boyd Blue Dot Project Jonathan Klodt Kambis Kohansal Vajargah Orianne Corman Andrew Fisch Ashish Kumar Iyas Aït Benhiba Máximo Plo Seco Michaela Kosmelova Gregory Wendt, CFP Victor Vorski

Question for you: 𝘞𝘩𝘢𝘵 𝘰𝘵𝘩𝘦𝘳 𝘧𝘪𝘯𝘢𝘯𝘤𝘦 𝘵𝘰𝘰𝘭𝘴, 𝘪𝘯𝘤𝘦𝘯𝘵𝘪𝘷𝘦𝘴, 𝘢𝘯𝘥 𝘱𝘦𝘳𝘴𝘱𝘦𝘤𝘵𝘪𝘷𝘦𝘴 𝘥𝘰 𝘺𝘰𝘶 𝘬𝘯𝘰𝘸 𝘢𝘳𝘦 𝘴𝘪𝘮𝘪𝘭𝘢𝘳 𝘰𝘳 𝘤𝘰𝘮𝘱𝘭𝘪𝘮𝘦𝘯𝘵𝘢𝘳𝘺 𝘵𝘰 𝘌𝘐𝘚 𝘪𝘯 𝘪𝘯 𝘵𝘩𝘦𝘪𝘳 𝘴𝘶𝘱𝘱𝘰𝘳𝘵 𝘰𝘧 𝘤𝘰𝘭𝘭𝘢𝘣𝘰𝘳𝘢𝘵𝘪𝘰𝘯? Rebecca Kowalski FPFS, Sustainable Finance specialist and Orianne Corman you're right, ergodic is not the most accessible word, at least not yet... I think of its pronunciation like good medicine: its doesn't taste too good but darn is it effective. On the etymology, ergodic is commonly thought to derive from the Greek words ἔργον (ergon: "work,undertaking" [note the parallel from the etymology of "entrepreneur") and ὁδός (hodos: "path", "journey").  I did some more digging too and found the original intent of the word ergodicity when first coined by physicist Ludwig Boltzmann referred to the "unique nature" (this is at the heart of understanding the ergodic dynamics of capital) of gaseous thermodynamics phenomena. Source: https://lnkd.in/enGtse7Z On the topic of new words, I'm a big fan of Glenn Albrecht Earth Emotion neologisms. Indeed: a new world needs new words. And I'll add: to talk about very ancient things. Book here: https://lnkd.in/eHbyv6aP In terms using an already known word, instead of ergodicity: If we want to be technical about the why behind ergodicity, I personally think not. It sits with me a bit like "quantum". It was probably a rather unknown word at the time of its origin. Fast forward to today, and its a kind of common word. Perhaps most people dont exactly know what it means (after all physics is picky with precision), but it points at a (r)evolutionary leap in humans' understanding of the nature of reality and a new era of civilization. SO, if we want to talk about what we can do and benefit from by working with the principles of ergodicity, yes, there many other things we can say:  - hampering the negative impacts of volatility through collaboration  - leveraging opportunity in path-dependent finance  - financing antifragile business ecosystems  - long-term holistic returns - systemically incentivizing economic collaboration - aligning stakeholder interests around the Commons - optimizing the circular performance of the ecosystem Graham Boyd Marie Arbelias Schuster Eduardo Esparza Cordell Jacks John Fullerton Jack Reardon Goparity | Impact finance Michaela Kosmelova Jonathan Klodt Elin Bergman Unreasonable BlackRock

Pa’rriba y pa’lante. The energy was palpable at this week’s Foro Latinoamericano de Inversión de Impacto, or FLII, in Mérida, where 1,000 Agents of Impact gathered to build the region’s impact investing ecosystem. As Dennis Price reports, impact assets under management and venture capital and other investments in the region have surged in the past decade. “It’s not the parties, it’s the people,” declared the FLII’s Carolina Puerta Ocampo. “If someone tells you about some opportunity in Latin America, don’t dismiss it because you are not investing right now in Latin America. You will. Latin America is hip right now. Latin America is the present and the future.” ImpactAlpha agrees: This week we launched "ImpactAlpha Latin America" with guest posts from Alberto Gómez-Obregón of CO_Capital on catalytic loan products, Lucas Conrado of Estímulo on blending finance for Brazil’s small businesses and María Carolina Suarez Visbal of Latimpacto on five reasons Latin America and the Caribbean are attracting impact investors. Opt in to receive the monthly newsletter. Agents of Impact in other regions are rising up and moving onward as well. Dennis also made the scene in San Antonio, where the Neighborhood Economics conference addressed the social determinants of wealth. In Chicago, Impact Engine doubled down on “purpose built” private equity with an $85 million raise, as Amy Cortese reported. ImpactAlpha contributor Louie Woodall reported on the UK’s new “nature market” for trading credits to achieve “biodiversity net gain.” Our correspondent Lucy Ngige reported from the Africa Tech Summit in Nairobi on early-stage climate tech in Africa. And 60 Decibels' Ellie Turner detailed how Mercy Corps Ventures, Acumen and Catalyst Fund are measuring their impact on climate resilience across emerging markets. ¡Adelante!

As Impact Seed embarks on a year of starting to fill the catalytic impact finance gap in Western Australia, this article is both topical and timely. Key takeaways: "Impact capital largely lacks the flexibility to push into many of the areas of urgent need facing people and planet", ie. 🔷 In many Indigenous communities, wealth is defined not only as financial success but also social well-being, community health, continuity of cultural practices, or environmental connection. Mainstream investors’ lack of understanding and acceptance of this can lead to capital being offered in ways and on terms that do not align with community norms, or to capital not being offered at all because of the perception that working with these communities is too difficult or costly. 🔷Having a well-developed economy and sophisticated financial sector does not prevent capital gaps. Conventional impact investing is not even close to addressing the full need (nor potential) here. We need to do more and do better, all around the world. 🔷 In many other cases, capital is available but just not in the amounts, and on terms and conditions, appropriate to the investee. 🔷Capital gaps result from misalignments between investors’ knowledge, attitudes, requirements and expectations, and investees’ profile, situation, values, context and constraints. Pinning the problem on the demand side solely is profoundly unhelpful in trying to resolve the issue, because the narrowing of capital gaps in many cases will involve developments on both demand and supply sides. https://lnkd.in/gTj5DCyM

#PRI Responsible Investing, Recognition for Action and Stewardship Short List Awards 2024 Announcement. Principles for Responsible Investment Awards 2024 Shortlist: All shortlisted submissions are spotlighted below, having been selected by a panel of independent judges. There are five shortlisted projects in each category. The winners will be announced at PRI in October live in Toronto, along with two Special Awards (one in Emerging Markets and one in Private Markets) which will be selected from submissions in the five main categories. Innovation in Responsible Investment Strategy Bintang Capital Partners – BCP Asia Fund II: The world’s first B Corp propagator fund GENUI – Good entrepreneurship: Investing with entrepreneurs to create strong returns and positive impact ILX Fund – Innovative vehicle to deploy impact institutional capital in EMS Innocap – Investi: Accelerating innovation in sustainable finance through collaboration Quadria Capital Investment Management Pte. Ltd. – Responsible investment strategy System Stewardship Aqua Capital – Embedding sustainability within the investment cycle CCLA Investment Management – CCLA corporate mental health benchmark DWS Group – Submitted on behalf of the Energy Efficiency Financial Institutions Group (EEFIG): Ten years of policy engagement Summa Equity – Impact accounting to measure and manage impact for a more stakeholder-centred economy Trinetra Investment Management LLP – Beyond wages: Bridging informal and formal work in emerging markets Recognition for Action – Climate Equitix – Innovation tool to analyse portfolio-wide physical climate risk Federated Hermes Limited – Climate action Nordea Asset Management – Methane collaborative engagement SAIL Investments – High impact climate and natural capital Recognition for Action – Human Rights AkademikerPension – Integrating human rights in multi-asset class investment strategy BMO Global Asset Management – Respect and protect human and Indigenous Peoples’ rights: A focus on Canada First Sentier Investors – Investors against slavery and trafficking Asia Pacific (IAST APAC) Redwheel – The Greenwheel human rights toolkit for investors Swedbank Robur – Driving engagement on children’s rights Recognition for Action – Nature AXA Investment Managers IM Alts – Financing natural capital restoration and protection EcoEnterprises Fund – 25 years of biodiversity investing Groupe Caisse des Dépôts – Nature is future Gresham House – Habitat banks as a new infrastructure asset class Nuveen, a TIAA company – Nature stewardship initiative Stay tuned! Read the full list: https://lnkd.in/dunnh9vy

The wisdom of maturity. Age can mean old. But with age can come maturity and with maturity can come wisdom. At ImpactAlpha, we’ve been reflecting on the maturing market for impact and sustainable investments, and signs that markets are wising up to socially and environmentally-driven value creation. It’s the rule of law, not deregulation, that underpins economic growth, argues LinkedIn co-founder Reid Hoffman. Climate action is anti-inflationary in the face of the mounting costs of intensifying weather events. An economy that delivers for workers, also delivers for investors. And that U.S. immigration surge? It’s a growth-driver that is set to boost federal revenues and reduce deficits over the next decade. As the impact investing market in Latin America matures, early impact champion Rodrigo Villar of New Ventures is seeking to scale impact, not by raising ever larger private equity funds, but by going deeper with specialized investment vehicles to address specific challenges. “Enlightened intermediaries” can act as conduits between institutional investors and local communities in building bio-economies in the Amazon and elsewhere, NESsT’s Kirsten Dueck told ImpactAlpha’s Jessica Pothering. Pooled loan funds, time-tested in public finance, can be used to de-risk greenhouse gas reduction projects, Matt Posner of Court Street Group and James McIntyre of Inclusive Prosperity Capital argued on ImpactAlpha. In another guest post, Karthik Ramanna of Blavatnik School of Government, University of Oxford shared insights into how the EU’s new carbon import tax could usher in rigorous standards for carbon accounting that can spread prosperity, not hurt it. The wisdom of long-time investors can counter criticisms of efforts to promote diversity, equity and inclusion. Surdna Foundation's Don Chen shared how impact fund managers like Impact America Fund graduated from the foundation’s program-related investment allocation to its return-seeking mission-related investment portfolio. Such private impact investments are outperforming the broader endowment, said Chen. In chronicling Kataly Foundation’s divestment from Wall Street, Lynne Hoey has aimed to demonstrate that “investing in communities and justice is possible,” and presents less risk than legacy investors would have you believe. The growing market for employee ownership is also growing up. Obran Cooperative, a worker-owned “cooperative conglomerate,” snagged an investment from Acumen America, reported Roodgally Senatus. Markets are wising up to the alpha in impact. – Dennis Price Dennis Price Zuleyma Bebell Amy Cortese Lynnley Browning Isaac Silk Robert Brown Sherrell Dorsey Lucy Ngige Imogen Rose-Smith Julian Kraus-Polk Brian Walsh Cesar Chavez Maricarmen Gonzales Michael Dobransky Jennifer C. Roxanna Calderon Amareux Rodriguez Joe Whitwell https://lnkd.in/gt4fjNr7