IN Academy: ESG Masterclass

Navigating the ESG journey

2020 consolidated ESG into mainstream asset management, with the pandemic response becoming integral to the
environmental challenge ahead. The timing couldn’t have been more appropriate for The Inside Network’s industry-first ESG Masterclass. Whilst bushfires have been removed from the front page, they remain front of mind for clients and advisers alike, as does an energy sector facing long-term disruption. Key social issues have been accelerated by the pandemic with gender and inequality a key focus of many governments.

Company executives have touched on their obligations to both society and shareholders, a debate that will likely play out for much of this decade. Governance problems persist. Wage underpayment proved to be regrettably common, while executive remuneration at a time of rising unemployment and income disparity, is ever more challenging. Accounting problems return again and again, mostly driven by blind ambition to drive a share price.

Despite the options available, implementing an ESG overlay to a portfolio is far from easy. Simply selecting investments that claim to screen holdings will not pass muster. Clients are likely to challenge exposure to stocks that transgress society’s expectations and hold their advisers accountable. The case for investments will need to weigh into the inevitable compromises and judgemental decisions.

These issues and many others were raised and discussed in detail, by thought leaders at The Inside Network’s ESG Masterclass. This report provides a short summary of each presentation and the key learning outcomes:

1. The evolution of ESG and key trends to watch in 2021;
2. Nuance required – the role of data in ESG investing;
3. Outside the box – moving beyond screening;
4. With power comes responsibility – company
   engagement;
5. Social license and impact – looking beyond the ‘E’;
6. Measuring success – active ownership and proxy
   voting.