NYU On ESG Integration And Corporate Financial Performance

The NYU Center for Sustainable Business will host its second annual Practice Forum entitled, “How to Assess the ROI on Sustainability for Corporate Practitioners and Investors.”

CSB Practice Forum: Panel – Investor Insights On ESG Integration & Corporate Financial Performance

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Transcript

Thank you both for this kind introduction. I feel small now. Big numbers but you know being a good guy it shouldn't matter too much I guess. But it's great to be here. Also thank you for inviting me. It's a pleasure to be here. So let me still a few seconds about the U.N. pension fund. We are a and it still exists a defined benefit open plan pension fund not only for staff members of the United Nations but also for about 23 different agencies across the world. So we have global liabilities and we have global assets. So we manage about 65 billion dollar. I know it's just a drop in the sea for you but 65 billion dollars globally across the world. Multiple asset classes and so another thing which is different I guess from many other public pension funds. We are not only the owner but also the asset manager because we've Menis about 85 percent internally in-house and all in New York here. And it makes a difference also in terms of we if we talk a bit more about the implementation later there's a difference between an asset owner and an asset manager in terms of complexity and governance and decision making.

What have you. So what we've been doing and what I call sustainable investing I don't use the ESG and CSR and you know Sri Aldo's works. I don't think it's extremely helpful necessary. I have we talk about sustainable investing. We are long term investors. We you know we think it's really important to think about this concept within our fiduciary responsibility. We basically Minnich on behalf of all our participants and for most people in the UN biggest financial assets. So for us everything we do shoot meet our fiduciary responsibility and so all the investments we make we look at sort of okay it is a risky in profile in that our expectations in line with a policy benchmark. So I always tell people we're not impact investors but we are investors with an impact and I think that nuance. They have a different objective they want to achieve impact or an outcome basically and we are institutional investors and our outcome is first of all to make whole all the promises we gave to our participants. So I think that's an important consideration. But having said that we do believe that integrating ESG and all those type of factors into your investment process should help you over the cycle to improve your risk return compared to sort of the traditional way. It's an investment belief. It's something we are still working on. It's it's a journey. It's you know if you want to integrate East Europe become a sustainable INVESTOR It's not about flipping a switch. This is really hard stuff and I'm sure my panel members will will agree that this is difficult it's complicated. It has heart components which are cool technology data providers systems what have you. And it has a soft component which is which is culture people and actually the self component is harder than the hard components.

It's always difficult to make sure integrate buy in across the board in an organization to implement change. And so people thinking initially with think about oh we need data providers everything but it has two components and I think it's really important if you start thinking about implementing this stuff your possession that human is both sides of the coin. A few words about what we do. We apply restrictions screening. We don't invest in tobacco and armaments but it's completely aligned with the mission of the United Nations. For decades that is nothing new for me. It's not really per se sustainable investing or IAST. This is really value based decision sort of mission level organization. This is where we stand for. Then we have ESG integration. We are again on a journey to integrate ESG holistically throughout all asset classes public equities but also the private markets and every different asset requires a different approach. And the third component of our strategy is engagement. So one is screening restrictions two is integration holistically the total fund level and three engagements. We are you know teaming up with our pension funds and collective engagement like the you know the serious initiative climate 100 plus we are signatory of that. We also work together.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and three kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own 2.5 grams of Gold