What strategies do financial institutions use to participate in ESG investments? In fact, there is no standard answer to this question. What ESG strategy a financial institution chooses depends on the ESG question it wants to target, what ESG financial product it wants to provide to investors, and its own professional advantages.
Taking MSCI as an example, one of its specialties is to do ESG index, and this requires data, so it developed the ESG rating database and rated it based on the 37 topics in IVA above. MSCI launches many ESG indexes, but each index has different target customer groups, so the ESG strategies used are also different. Indexes that are oriented towards investor values, such as Catholic values, Islamic values, and divestiture of controversial weapons, are all ESG investment strategies that use negative screening as the main strategy to eliminate companies or industries that do not conform to values. However, when MSCI wants to provide investors with an index that maximizes the type of shareholding, the negative screening method is not a good choice. At this time, it will use the ESG integration method to let investors become "universal shareholders." To form its ESG overall index series.
Financial intermediaries are specialized in using active shareholder law, which is the shareholder participation service company. For example, the well-known Hermes investment company has a shareholder service department named Hermes EOS, which combines the power of active shareholders to help them communicate and interact with the holding company on ESG issues in order to change the company ’s ESG practice. In addition, financial intermediaries also specialize in impact investment, such as the American Smart Fund and the domestic Yuhong Capital Management Company. In addition to the impact investment law, they use the ESG strategy, as well as the active shareholder law, which involves the investment The post-investment management process of the new startups helps them form strategic planning and strengthen organizational construction.
