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Sustainalytics Reporter March 2015

Issue 24 - March 2015

All Signs Point to Increasing Global Adoption of Responsible Investing Practices

Over the past few years, the responsible investing field has reached a significant turning point globally as more mainstream investors integrate ESG factors into their investment decisions. Last week, the Global Sustainable Investment Alliance issued its second annual international assessment of the sustainable investment landscape. Most striking, the report reveals that global sustainable investing assets grew 61 percent from 2012 to 2014 to reach USD 21.4 trillion. And, last year, there was a 19 percent increase in PRI signatories, signaling ESG integration by traditional asset managers is on the rise.

According to industry reports, U.S.-domiciled assets under management using SRI strategies grew to USD 6.57 trillion in 2014, a 76 percent increase over 2012 levels. In Canada, responsible investing assets under management increased from CDN 600 billion to over CDN 1 trillion, representing a 68 percent increase between 2013 and 2011. ESG integration in Europe and Australia also grew by 38 percent and 51 percent, respectively. In Japan, over 175 asset managers, asset owners and other market participants have signed the Japanese Stewardship Code, which encourages investors to engage with companies on sustainability.

To read the key findings from each report, please click here

Analysts' Insights

Coal in China: A Sunset Business?
by Sun Xi

Sun Xi, Senior Analyst, Research Products

Despite widespread consumption, China’s coal industry has experienced a significant decline in recent years. With overcapacity issues, tightened air pollution, water and work safety regulations, and increasing competition from the renewables sector, the coal sector may continue to face systemic challenges.

Read "Coal in China..."

Energy Analyst Field Trips: Adding Value to ESG Analysis
by Dayna Linley-Jones

Dayna Linley-Jones, Director, Research Products

As an extension of the traditional research process, operational site visits are a valuable opportunity for ESG analysts. These field trips often lead to a better understanding of company culture and local operating challenges – insights that would be difficult to obtain during the typical desktop review process. 

Read "Energy Analyst Field Trips..."

Sustainalytics' Perspective

10 for 2015 - Generating Value in a Fragile Market

Thematic Research: 10 for 2015 - Generating Value in a Fragile Market

Sustainalytics’ new thematic research report 10 for 2015 – Generating Value in a Fragile Market offers a macro level view of how global economic decisions relate to ESG trends and a micro view that reveals the most significant ESG risks and opportunities at 10 companies. With valuable ESG insights, the report helps investors with their asset allocation and asset selection processes. 

On February 19, Sustainalytics hosted a webinar presenting the findings from the report. Download the executive summary and listen to the replay.

 Banks sector report shortlisted for Farsight Award

Sector Report: Banks

Sustainalytics is proud to announce that our sector report Banks – Like a Phoenix from the Ashes? has been shortlisted for the Farsight Award 2014/2015. Of the 57 publications submitted for consideration, seven were shortlisted. The Farsight Award recognizes the best individual piece of analysis done by an investment research institution that integrates traditional financial analysis with longer-term environmental, social and governance issues. The winner will be announced during the Sustainable City Awards ceremony taking place on Monday, March 23, 2015 in London, England. Download the executive summary.

Incident and Controversy Assessments

Incident and Controversy Assessments

This month Sustainalytics’ analyst team assessed the impact of TransAsia’s deadly plane crash near Taipei on the company’s reputation. They also looked at the risks for Georgia-Pacific LLC after it was accused of dumping toxic waste into a local river over several years.

Read “Incidents and controvery assessment..."

Inside Sustainalytics

Danske Capital and WHEB Asset Management select Sustainalytics as their research and data provider

Danske Capital, the Denmark-based international asset manager and member of the Danske Bank Group, will incorporate Sustainalytics’ ESG research and data solutions into its investment products. Read the press release

London-based WHEB, an independent sustainable investment asset management firm, will integrate Sustainalytics’ ESG research into its stock selection and portfolio management activities. Read the press release

4th Responsible Investment Conference in Colombia

On February 10, 2015, LatinSIF organized the fourth Responsible Investment Conference in Colombia where over 80 global investors took part in discussions around the topic of ESG integration. Sustainalytics was a proud sponsor of the event and participated in a panel on green bonds. For more information (in Spanish), click here.

Ontario pensions learn more about ESG

Michael Jantzi, Katharine Preston & Randy Bauslaugh

From left to right: Michael Jantzi, Katharine Preston and Randy Bauslaugh

On February 24, Sustainalytics hosted a breakfast seminar in Toronto to discuss a recent amendment to the Pension Benefits Act. Pensions will soon be required to report on how they are considering ESG information in their investment decisions, and this event offered Ontario pensions relevant and insightful information about incorporating ESG factors into their investment strategies. Michael Jantzi moderated the discussion, and Randy Bauslaugh, partner at McCarthy Tétrault, and Katharine Preston, manager of the Responsible Investing Group at OPSEU Pension Trust, spoke about the potential fiduciary and reputational risks of not making an informed decision about ESG considerations.


Analysts' Insights

Sustainalytics' Perspective

Inside Sustainalytics

Research at Work


Sustainalytics in the Media


Russell Investments: Are ESG tilts consistent with value creation?
In this report Russell Investments explores the relationship between ESG tilts and value creation in active security selection. In Russell’s view investors may need to pay more attention to the impact of ESG on investment returns. Russell used Sustainalytics’ ESG scores to analyze the exposure of various stock market indices to ESG factors.

On March 19, 2015 Sustainalytics and Russell Investments will host a webinar to discuss ESG tilts and value creation at regional and global level.

Download the report here 

Register for the webinar here

Breckinridge Capital Advisors: ESG integration in corporate fixed income

Breckinridge, the U.S.-based credit research, fixed income asset manager, has recently published a white paper on ESG integration. The report finds that ESG integration helps to mitigate pricing risks, and has a low positive correlation with credit agency ratings. The report also found companies that manage their material ESG risks and create value for their stakeholders represent a more stable credit and a better investment for Breckinridge’s clients.

Download the report 

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5 March, 2015 | Toronto
Investing with Impact: Rotman Responsible Investing Panel

18 March 2015 | Webinar
ESG Trends to Watch in 2015

19-20 March, 2015 | Amsterdam
Morningstar Institutional Conference

30 March - 1 April, 2015| Washington, D.C.
Council of Institutional Investors Spring Conference

27-28 April, 2015 | Toronto
Global Reporting Initiative Training

Visit our website for a full listing of events


The top 10 sustainability stories to watch in 2015 -Guardian Sustainable Business

Spanish government bank attracts ESG investors to new €1 bn 'social bond' -

The challenges of stranded asset risks - First Affirmative blog

Financial institutions play catch-up in deforestation fight - Institutional Investor


Sustainalytics | Your responsible investment partner

Sustainalytics supports investors around the world with the development and implementation of responsible investment strategies. The firm partners with institutional investors, pension plans, and asset managers that integrate environmental, social and governance information and assessments into their investment decisions.

Headquartered in Amsterdam, Sustainalytics has offices in Boston, Bucharest, Frankfurt, London, New York, Paris, Singapore, Timisoara and Toronto, and representatives in Bogotá, Brussels, Copenhagen and Washington, D.C. The firm has over 200 staff members, including more than 100 analysts with varied multidisciplinary expertise and thorough understanding of more than 40 industries.