ESG Ch. 2 ESG Market

Question 1

World Commission on Environment and Development (WCED) were

Answer 1

in response to mounting concern surrounding ozone depletion, global warming and other
environmental problems associated with raising the living standards of the world’s population in 1983

Question 2

the creation of the UN Commission on Sustainable Development was propmted by

Answer 2

the Rio summit in 92

Question 3

responsible investing dates back as far as investing

itself.

Answer 3

initally set by religious groups - negative screening or called “SRI” in the early days

Question 4

the first ethical mutual funds that moved to screens based on religious traditions was

Answer 4

the Pioneer Fund

that was launched in 1928

Question 5

The Sullivan Principles were

Answer 5

used by investors to engage and
divest, required that a condition for investment for the investee company was to ensure that all employees,
regardless of race, are treated equally and in an integrated environment as a condition for investment

launched in the 70 is south Africa thorugh apartheid

Question 6

Modern responsible investment

Answer 6

have been the growth in shareholder activism, the
more widespread consideration of environmental factors and the introduction of positive-screening investing, which seeks to maximise financial return within a socially aligned investment strategy.

The modern form of ESG investing began with a letter and call to action in 04 (and 02 after Enron and Sarbanes Oxley)

Question 7

the launch of the Principles for Responsible Investment (PRI) at the New York Stock Exchange in 2006 and the launch of the Sustainable Stock Exchange Initiative (SSEI) the following year.

Answer 7

was sparked by the UN Environment
Programme Finance Initiative (UNEP FI) produced the so-called Freshfields Report, which showed that ESG
issues are relevant for financial valuation and thus, fiduciary duty

Question 8

dominante type of ESG by country

Answer 8

▶ Negative screening is the largest strategy in Europe.
▶ ESG integration commands most assets in the USA, Canada, Australia and New Zealand.
▶ Corporate engagement and shareholder action constitute the predominant strategy in Japan.

3/4 of assts are insto - though declining with more reatil access

Question 9

which shows the asset class allocation reported in Europe, the
USA, Japan and Canada in 2018. Collectively in these regions:

Answer 9

▶ most assets were allocated to public equities: 51% at the start of 2018; whereas
▶ the next largest asset allocation is in fixed income, with 36%.
This is a reversal from 2016 when, with only Europe and Canada reporting on asset class allocation:
▶ 64% of sustainable investing assets were in fixed income; and
▶ 33% were in public equities.

Question 10

4 main types of asset owners

Answer 10

1. Pension funds.
2. Insurance.
3. Sovereign wealth funds, endowment funds and foundations.
4. Individual (retail) investors and wealth management.

Question 11

3 types of fund promoters

Answer 11

1. Investment consultants and retail investment advisers.
2. Investment platforms.
3. Fund labellers.

Question 12

8 types of stakeholders

Answer 12

Asset Owners
Asset Managers
Fund promoters
Finacial Service
Policy makers
Investors
Gov 
Society/academia 

Memory
FAAF PIGS

the rest is an expansion of these