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NEWSLETTER

Hong Kong Fund Services 2021

Institutional Asset Manager 11/06/21

institutional asset manager maddy taylor captioned.jpgThe UK’s south-west county of Cornwall is commanding the world’s attention as the leaders of G7 nations meet to discuss the recovery from the coronavirus pandemic. The summit appears to be making moves towards ‘vaccine diplomacy’, as the UK, US, Canada, Japan, France, Germany and Italy discuss donating 1 billion Covid-19 vaccine doses to poorer countries in an effort to stamp out the virus worldwide.

G7 leaders are also under greater pressure to take action on climate change. UK Prime Minister Boris Johnson is reportedly going to push for a new “Marshall plan” to help developing countries decarbonise their economies. This would help to fund large-scale renewable energy projects across Africa and Asia.

The UK’s pension pots have become the latest priority for decarbonisation. In addition to recent legislation has already required UK pension funds to report their climate change impact, the UN High Level Climate Action Champion is now discussing a mandatory net zero plan for UK pensions.

An imminent transition to a low-carbon economy is starting to sound the alarm for investors in high yield bonds. High-yield bonds were found by MSCI to be more exposed to risks from a climate transition than equities and investment-grade fixed income. Suggestions for lowering the risk includes surgically removing energy, utilities, and materials companies from these portfolios.

As the push towards greener portfolios intensifies, so does the asset management industry’s ongoing battle with higher data costs.

Benchmarking data is essential for building ‘ESG’ portfolios and measuring performance – but asset managers have been dealt double-digit price hikes to access this data in recent years. EFAMA and ICSA are calling on regulators to address “natural monopolies and oligopolies” in the benchmarking sector which they say lead to unfair pricing and competition issues.

Madeleine Taylor
Editor, Institutional Asset Manager

 

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