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Research Outline
Prepared for Josh | Delivered September 23, 2019
ESG Funds in the Financial Investments Industry
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Goals
To understand how the financial industry is marketing and educating audiences on ESG funds.
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Early Findings
There are no
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case studies or robust analysis for the marketing of ESG funds. Instead, we analyzed primary material from the financial
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industry to understand the messaging, language and sentiment for how this industry is trying to educate its audiences on ESG funds.
For example, State Street Global
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's
press release
on its new ESG fund conveys a sentiment of innovation and market-leaders (" The Fund is the first money market fund to offer a portfolio composed entirely of investments that meet ESG criteria at the time of purchase.") and pride in how ESG can fit into a broader investment strategy
(
"
“
We’re proud to apply State Street Global
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’ longstanding ESG commitment to the launch of this fund."
)
Vanguard
announced it was entering the ESG market in March. Traditionally a passive investor, Vanguard's move represents its first actively-managed fund in ESG. Vanguard's language is similar of innovation and being market-leaders, but also that they are listening and responding to what their clients want: "A Vanguard spokesperson says the company only launches funds that meet investor needs. “We have a long history of fund innovation, and we take a highly thoughtful approach to product development.”"
John Hancock Investment Management
tells clients that investing in ESG is a way to be beneficial to oneself making a "positive impact on the environment and society". It tells investors to have their "hard-earning savings go to work". They also have an
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showing how ESG investing can be just one step short of philanthropy in "making a difference".
Another firm,
Capital
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Group
has an educational document "
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" ESG for their investors. This is an internal document. It recognizes that ESG investing comes with some challenges, especially around the lack of consistent reporting and listing standards. They then give advice on how institutional investors can apply ESG to their portfolios.
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calls ESG a "new generation". And asset managers can "stand out". They also proclaim to offer innovative solutions for ESG investing, "
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[
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] it possible to find sustainable funds even if they aren’t specifically marketing themselves as products that support an ESG-investing approach."
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Financial Communications
had a panel discussion on how financial services firms can effectively market their ESG
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. They identify a three-prong approach: embracing ESG as part of a fiduciary duty, tell stories to connect ESG to everyday actions and emphasize returns & urgency.
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