germanyde
Sustainable Investing Glossary

ESG Integration

The structural integration of information on Environmental, Social and Governance (ESG) factors into the investment decisionmaking process.

Sustainable investors believe that sustainability can have a material impact on companies’ performance. Factoring in financially relevant sustainability information thus leads to better investment decisions. 

As a wide variety of sustainability information is available, investors first determine which ESG information is financially relevant. The second step is to analyze the impact of these material factors on the individual company and any competitive advantages or disadvantages that arise. The third step is to translate this impact into adjustments to the valuation models used for equities. 

Robeco also integrates sustainability information into the analysis of government and corporate bonds. Robeco’s credit analysis focuses on a bond issuer’s cash-generating ability and the quality of those cash flows. The team uses a fixed analysis model for this with five different variables, including ESG. The importance of E, S and G factors differs for each sector. The credit crisis, for instance, revealed the importance of good corporate governance in financial credits. 

Within its government bond portfolio, Robeco uses the ‘RobecoSAM Country Sustainability Ranking’. The ranking is based on a comprehensive ESG database. The ranking is updated twice a year and functions as an early-warning system that helps to identify both the threats and the opportunities in a country before they are reflected in spreads or ratings.

Also read:
Seven steps to ESG integration
ESG integration with a longterm investment perspective

ESG investing
ESG investing
Wir integrieren Umwelt-, Sozial- und Unternehmensführungskriterien (ESG) in den meisten fundamentalen und quantitativen Strategien.
Weiterlesen
The unique climate change risks facing insurers
The unique climate change risks facing insurers
Climate change has become undeniable, and no industry has greater exposure to its risks than the insurance sector.
02-07-2020 | Einblicke
Verknüpfung von wirtschaftlichen Aktivitäten mit UNO-Nachhaltigkeitszielen
Verknüpfung von wirtschaftlichen Aktivitäten mit UNO-Nachhaltigkeitszielen
Ein neues Forschungspapier beschreibt die Auswirkungen wirtschaftlicher Tätigkeit auf die Erreichung der UN-Ziele zur nachhaltigen Entwicklung (SDGs)
30-06-2020 | Einblicke
SI Opener: Die Bergbauindustrie spielt beim Übergang zu einer grüneren Wirtschaft eine entscheidende Rolle
SI Opener: Die Bergbauindustrie spielt beim Übergang zu einer grüneren Wirtschaft eine entscheidende Rolle
Der Bergbau ist ein komplexer, oft als nicht nachhaltig angesehener Wirtschaftszweig.
25-06-2020 | SI Opener