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2019 | OriginalPaper | Chapter

6. Institutional Investments and Responsible Investing

Authors : Ria Sinha, Manipadma Datta

Published in: Financing Sustainable Development

Publisher: Springer International Publishing

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Abstract

This chapter is designed to provide insights on the pertinence of responsible investing in both developed and developing economies in light of the international deliberations on sustainability and sustainable development. Responsible investing presents a strong business case for institutional investors to merge ethics with profitability. However, to develop a strong business case, it is imperative to dive deeply into the various forms of responsible investing, and the recent trends, drivers and barriers associated with it. Institutional investors pertain to various environmental, social and corporate governance (ESG) evaluation methodologies, subject to the type of financial instruments and availability of ESG data. These assessments help investors to undertake informed decisions and lead to ESG integration in several asset classes such as listed equity, fixed income, hedge funds and private equity. Although the extent of integration varies considerably across geographical domains and asset classes, there is an increasing recognition of better returns from ESG diversified portfolios. Several asset management companies (AMCs) are adhering to varied ESG integration approaches in developed economies. These approaches clearly cater to different application, research and management levels to be categorized as fundamentalist, believer, cautionary, discretion, statistician and transition-focused. Despite the rising signatories to the United Nations Principles for Responsible Investment (UNPRI), there are several deterrents which affect the growth of responsible investing. The reflective and exploratory approach undertaken in this chapter is likely to benefit students, academicians and professionals working in the domain.

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previous chapter Socially Responsible Financial Markets
next chapter Patronage in the Financing of Social and Sustainable Projects
Appendix
Available only for authorised users
Footnotes
1
The percentages provided in parentheses are absolute considering the fact that a single asset owner resorts to multiple approaches.
 
2
Bond issuers that derive greater than 95% of revenues from climate-aligned assets and green business lines.
 
3
Labelled green bonds are certified by an external agency and are clearly designated for the purpose of green investing.
 
4
Bond issuers where 75–95% of revenues are derived from climate-aligned assets and green business lines.
 
5
Municipal bond issuers from the US. These are dedicated authorities, agencies, departments and similar divisions with more than 95% of their revenue derived from climate-aligned water, transport, waste, land use and renewable energy operations.
 
6
Applicable for the Indian case.
 
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Metadata
Title
Institutional Investments and Responsible Investing
Authors
Ria Sinha
Manipadma Datta
Copyright Year
2019
Publisher
Springer International Publishing
Book
Financing Sustainable Development

Print ISBN: 978-3-030-16521-5

Electronic ISBN: 978-3-030-16522-2

Copyright Year: 2019

DOI
https://doi.org/10.1007/978-3-030-16522-2_6