Mazars ESG Sustainable Investment report 2022

Since our last report the economic and geopolitical landscape has shifted significantly.

Inflation, initially caused by the pandemic and then exacerbated by the war in Ukraine, has brought about a new era for monetary policy principally felt through the effects of rising interest rates and the removal of Quantitative Easing.

The impact for all investors has been significant, as for the first time in many years both equities and bonds have sold off at the same time.

The volatility for investors with a sustainable overlay has arguably been more pronounced. Whilst oil and gas producers have benefitted from higher energy prices, sectors more usually found in ESG portfolios such as Technology have suffered as the ‘risk-free rate’ against which future earnings are discounted rose.

Long-term theses for sustainable investing remain sound, but short-term fluctuations test resolve. Now more than ever a focus on the impacts of investing sustainably should be at the forefront.

Our report considers the positioning of our sustainable model portfolios through our proprietary Sustainability Score based upon the key characteristics of each of the underlying funds within the portfolio.

We then look to bring to life some of the key themes within the portfolio together with individual stock examples, assess the portfolio’s alignment with the UN SDGs, highlight positive engagement by fund managers, and look forward to anticipated developments in the ESG arena.

In this short video Prerna Bhalla, Investment Analyst at Mazars, provides some further insight into the sustainable investment landscape at this time.