{"id":26772,"date":"2019-12-02T12:20:45","date_gmt":"2019-12-02T17:20:45","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=26772"},"modified":"2020-01-06T13:20:39","modified_gmt":"2020-01-06T18:20:39","slug":"what-mainstream-means","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/what-mainstream-means\/","title":{"rendered":"What Mainstream Means"},"content":{"rendered":"
>> Back to December 2019<\/a><\/div>\n

 <\/p>\n

\"Dana-Investment-Advisors-Logo\"What a year it has been for Sustainable Investing. The year before was noteworthy as well. In fact, a year ago in the GreenMoney Journal<\/em>, Amy Domini called 2018 \u201cThe Year Wall Street Got Sustainable Investing.\u201d<\/a> BlackRock came onboard, along with a host of major investment banks, and CFA Societies across the country hosted seminars and curriculum on the topic. Evidence for the growth of ESG and SRI assets is supported by the oft-quoted Trends Report produced by The Forum for Sustainable and Responsible Investment (USSIF). In the 2018 edition<\/a>, the report noted that \u201c1 in 4 dollars of U.S.-domiciled assets\u201d used SRI strategies at the start of that year. ESG and Sustainable Investing broke out with even more supporters in 2019, accompanied by a host of new products. A recent Morningstar article<\/a> noted that \u201cSustainable funds are on track to triple\u201d inflows in 2019 compared with 2018. As this decade comes to a close, let\u2019s take a moment to assess the progress and the way forward for ESG Investing.<\/p>\n

First, there has been significant progress in identifying and tackling ESG issues. U.S. renewable energy growth has been tremendously strong over the past several years, and supply forecasts for the early 2020s in the U.S. remain robust. Tax credits have helped, and are rolling off, but the economics continue to improve driven by falling prices in solar, wind, and storage. These gains are largely at the expense of coal. Investors have availed themselves of low-carbon portfolios that benefit from improved corporate, science-based carbon emissions targets and focus on exposure in supply chains. Data providers, such as Trucost, have helped in this area, as have efforts by TCFD (Task Force on Climate-related Financial Disclosures) and more. With this growth also come questions of balancing renewables with baseload or intermittency and reliability.<\/p>\n

In water-related issues, corporate disclosure, metrics, and target setting have improved significantly. Investors are increasingly aware of the industries and companies with the greatest exposure to water scarcity, quality, and resilience issues, and have a far better awareness of the localized nature of water risks.<\/p>\n

<\/p>\n

Proponents of a circular economy, most notably the Ellen MacArthur Foundation, have made great strides, particularly in the area of packaged goods. These are no small accomplishments in a global economy built on fossil fuels and a \u201ctake-make-dispose\u201d system. There is clearly more to do, but the groundwork has been laid, and investors have taken note.<\/p>\n

If \u201cmainstreaming\u201d is the end game, what exactly does that mean for 2020 and the next decade?<\/h2>\n

Responsible Investing has grown from a cottage industry, born from values-based investing, to one that truly is becoming mainstreamed based on material <\/em>ESG factors that impact value, risk, and return. Increasingly, investors, including Dana Investment Advisors, are embracing Sustainability Accounting Standards Board (SASB) and its analytical framework for identifying and reporting materiality of ESG impacts. This is a unifying effort and one that we applaud. At Dana, quantitative models have always played a role in our investment management process, and the information flow over the past several years has brought greater granularity. Along with this existing data, Dana has increased efforts on fundamental analysis and engagement to uncover long-term trends, competitive positioning, and emerging disruptors. We believe that ESG and financial integration of material factors will continue to grow, providing more opportunities to add alpha and reduce risk for clients.<\/p>\n