The socially responsible investment (SRI or SRI for its acronym in English) is basically a process of selecting assets that it relies on criteria, negative, and exclusion (rejection, for example, arms companies, tobacco or alcohol); in political beliefs, on issues such as environmental, ethical or governance, in religious principles, in social welfare, and so on. The ISR is typically identified, given that in most cases they go hand in hand, with the criteria of environmental, social and governance (known as ESG, ESG for its acronym in English), but it is true that there can be a (ISR) without the other (ASG), and that the latter criteria may also be used, as a tool, in the management of other assets.
The reality is that socially responsible investment has come to stay. The value of an investment is not only a question of profitability. An increasing number of savers ask for their money will have a positive impact on society and the world in general. According to data from Morningstar, the money that is coming in this 2019 funds sustainable triple that of the previous year both in the united States as in Europe, surpassing $ 12 trillion in the first case and more than 600,000 million euros, in the second.
For Bank of America Merrill Lynch, this is not a passing fad: in one of his recent reports predicted a revolution. In the opinion of the experts of this entity, there is a clear commitment to capitalism moral, by the actions “good”. Your forecasts claim that in the next two decades it will surpass the 20 billion dollars in funding and sustainable strategies. It is already so extensive the interest of the so-called finance with an awareness that the National Commission of the Market of Values (CNMV) has to include on its website a new section dedicated to them, with the main definitions, concepts and typologies, as well as the axes of the regulatory framework.
socially responsible investment funds, in most of the cases, examines and analyzes the profitability, risk and liquidity of investments made, but also valued —it is what is known as analysis non-financial— if the chosen companies take care of the environment, what is your carbon footprint, if they do, toxic emissions, if properly managed the use of water, if you have a positive impact on their social environment, if the working conditions of their employees are right, if they comply with human rights, whether or not to continue an adequate business ethics, whether they are demanding or not with the fiscal transparency, and a long list of demands.
A world so wide that, according to Javier explains Monjardín, investment advisor of Deutsche Bank, “we find funds that perform a global integration of all these criteria and others that just focus on some of them.” In any case, in your opinion, what is advisable is to choose between “best of class”. With your data in hand, this type of investment is providing levels of profitability above the average in recent years. From January 2018, the MSCI World index SRI, which is based on the MSCI World has outperformed its benchmark conventional at 4.7 percentage points.
Since September of 2007, the index of sustainable has generated an annualized return of 6.3%, exceeding the MSCI World by 0.7 percentage points each year. For its part, at the end of September of this year, is the indicator MSCI Emerging Markets ESG Leaders has achieved an annualized return extra 3.47% versus the overall index, MSCI Emerging Markets. All this, in addition, “with a level of volatility lower so that the ratio of profitability to risk improved substantially,” stresses Monjardín.
The fund BNY Mellon Asian Income Fund-Euro Accumulation has, according to the rating of Morningstar, five “balloons” as far as sustainability is concerned —that is to say, is above the average in both criteria of environmental, social and governance— and a profitability analyzed in the last three years of 7,52% (more than 18.6% in the last twelve months). Lottie Meggitt, analyst, responsible investment at Newton, part of BNY Mellon Investment Management, acknowledges with some humor that makes it so only a few decades ago, if one showed the slightest shred of environmental awareness or concern for the planet, “will be branded as hippy or hugs-trees”. For her, there is a growing awareness of climate change, the increasing levels of poverty and gender inequality, which, among other things, is changing the way we invest.
No consistent data
despite what could be a positive development, Meggitt believes it is necessary to improve much in this field. “Companies do not publish consistent data. In a perfect world, we would love to be able to add data on the level of contribution of the positions of the funds to the Sustainable Development Goals (SDGS). However, as each company publishes this information as it seems, it is extremely difficult to compare companies, measure progress and report on the funds”.
UBS (Lux) Equity Fund – China Opportunity also has “five balloons” in sustainability. His performance in 2019 exceeds in the absence of a few days to close out the year 40% (+24,26% per annum in a period of three years). Michael Baldinger, head of sustainable investment at UBS Asset Management, acknowledges that its management has been a growth of 72% of sustainable investments and a reduction of 60% of the assets related to the carbon with regard to 2018. “Our commitment is clear in this sense; in fact, we have introduced standards even more stringent, including a complete prohibition of funding to project level for new coal-fired power plants in the world.”
In figures
12. Is the number of billions of dollars that are invested in funds that are socially responsible in the united States in 2019, triple the amount last year. In Europe, this capital has also been multiplied by three and sum of 600,000 million euros.
20. The forecasts of Bank of America Merrill Lynch argue that in the next two decades, the active and sustainable strategies to exceed 20 trillion.
the 4.7. Are the points of return that exceeded the MSCI World index SRI to the MSCI World since January of 2018.
40%. Is the value obtained by the Equity Fund China Opportunity UBS in 2019. BNY Mellon Asian Income Fund-Euro Accumulation is points to 18.6%.
