On April 11, 2019 The Asset ESG Forum reported that the World Wildlife Fund (WWF) has launched a new report that “aims to support asset managers to develop ESG capabilities by clarifying best practice responsible investment.
‘Resilient and Sustainable Portfolios: A Framework for Responsible Investment’ is a new report and framework launched by the WWF that will support asset managers to develop robust environmental, social, and governance (ESG) capabilities amidst emerging expectations to manage sustainability risks, opportunities and impacts.
Firstly, it recommends that asset managers set clear expectations for the sustainability practices and disclosure of their portfolio companies, and that these are based on science-based, multi-stakeholder standards. Through ongoing monitoring and engagement with companies to improve both their performance and disclosure, stronger ESG practices by asset managers can go a long way in driving the shift to low carbon and sustainable business models and the disclosure of science-based, comparable, and forward-looking data by portfolio companies.
Secondly, it encourages asset managers to develop deep, science-based ESG integration capabilities – a prerequisite for driving outcomes in line with the Paris Agreement and the Sustainable Development Goals. Science-based tools and criteria, often based on asset-level data, can be used in parallel with corporate disclosures to overcome current low levels of disclosure.
The indicators draw from existing best practice recommendations from the Task Force on Climate Disclosure (TCFD) and Principles for Responsible Investment (PRI), and layer on science-based standards, targets and impacts. These draw on WWF’s expertise from being part of cutting-edge global sustainable finance initiatives such as the EU Technical Expert Group tasked with delivering on the Sustainable Finance Action Plan; its work with some of the world’s largest companies on transforming their business models; developing science-based sustainability standards, and from leading on-the-ground conservation projects.
Taken together, the framework can help assess how well asset managers are building resilience in their portfolios whilst aligning financial flows to support sustainable development in line with Paris Agreement. In this way, the finance sector can harness its power to create positive economic, environmental and social outcomes that maximize value for all stakeholders.”
You may read the article on The Asset ESG Forum internet site.