Name: Distilling the ESG Signal for Enhanced Performance and Downside Protection
Start: 2024-06-20T14:00:00Z
End: 2024-06-20T14:01:00.000Z
Location: BrightTALK
Rating: 4.4

ESG, climate, and sustainable investing insights. Stay ahead of changing regulations. Morningstar analysts share their insights on material ESG risks, sustainability reporting, and more. 

As stewards of some of the largest pools of capital in the world, Asset Owners play a critical role in shaping strategy and considerations for investment management. Morningstar’s Voice of the Asset Owner Survey was created to better understand the motivations, challenges and attitudes of institutional asset owners amid a rapidly changing global investment landscape.  

Join us for a live webinar with our experts for a deep dive into what’s on the minds of asset owners, with focus on key considerations such as: 
- Every asset owner surveyed is allocating at least a portion of their assets to strategies taking ESG factors into account 
- Climate transition readiness remains the most material environmental factor, with labor practices and business ethics headlining material concerns for social and governance, respectively 
- Globally, 78% of asset owners surveyed view active ownership and engagement useful in driving the implementation of ESG 

Speakers: 
Thomas Kuh – Head of ESG Strategy, Morningstar Indexes 
Arnold Gast – ESG Research Director, Morningstar Sustainalytics 
Paul Schutzman - Head of Client Solutions, Institutional Investors  
Catalina Secreteanu, (Moderator)Managing Director, ESG Solutions, Europe

Insights from the 2024 Voice of the Asset Owner Survey

Material ESG concerns such as severe weather events from climate change, supply chain disruption, nature and biodiversity loss, data privacy concerns and more have real-world implications for business and finance. Different materiality frameworks (single, double and dynamic) can help investors assess both the risks to financial performance and impact that companies have on their environment and society.

What to expect:

- Explore how materiality frameworks have evolved and how they impact investment strategies, from single to double and dynamic
- The data investors need to effectively assess and integrate risks and opportunities 
- How varying segments might utilise different approaches in their strategy and address different priorities 
- How emerging regulation such as CRD, CRFD may impact approaches and strategy

Join us for a thought-provoking webinar with sustainability professionals from the financial services industry. We will discuss, compare and contrast approaches, and how the advent of regulation and improved access to data may change the ESG landscape, enhancing reporting, improve stewardship outcomes, and more.

Speakers :
- Bjorn de Smedt, Climate Change Specialist,  First Sentier Investors
- Amanda Yap, Head of Sustainability, Fullerton Fund Management

Moderated by:
- Michelle Cameron, Commercial Leader, Morningstar Sustainalytics, AU & NZ

[APAC Webinar] Single, Double, or Dynamic? An Exploration of Materiality in ESG Investments

The Stockholm Resilience Centre states the global economy is currently operating outside the safe zones for six of nine planetary boundaries, and ecosystem services are not appropriately priced by global markets.  
  
As a result, there are growing expectations from governments, investors, and society at large for the private sector to take accountability for its contributions to biodiversity loss.   

How can investors appropriately assess portfolio risks from biodiversity loss such as deforestation and species extinction, and engage to manage these risks and benefit from opportunities through effective stewardship?   

Join experts from Morningstar Sustainalytics and institutional investors to discover:  
     - What is biodiversity and how does it connect to climate and human rights? 
     - What are the financial risks associated with biodiversity and nature-related loss? 
     - How and why stewardship can lead to improved investment outcomes. 
     - A real-world example how this works in practice. 

Speakers:  
Lindsey Stewart (Moderator), Director of Investment Stewardship Research  
Ruby Jeng, Senior Analyst, Stewardship, Morningstar Sustainalytics  
Dr.Dai Yamawaki, Senior ESG Investment Manager, Nomura Asset Management  
Kaboo Leung, Active Ownership Specialist, NN Group

Register now to reserve your space and learn more about this pressing and emerging topic in the region.

The Value of Nature: Biodiversity, stewardship, and thematic engagement in a connected financial landscape

In a world where sustainable investing is rapidly becoming the standard, the ability to effectively harness ESG data is critical. Yet, the path from data to actionable insight can be complex. Challenges such as data fragmentation, inconsistent reporting, and information overload often hinder organizations from fully realizing the potential of ESG data. 

Join us for an in-depth session designed to equip you with the tools and insights necessary to navigate these challenges. This webinar will feature a demo of Morningstar Sustainalytics' ESG data solutions, providing you with a practical understanding of how our tools can be leveraged for portfolio construction, investment selection, screening, screening and monitoring, and more.  

During this session, you will: 
- Gain insights into the evolving landscape of ESG data and the critical role it plays in sustainable investment. 
- Engage in a demonstration of our solutions, where we’ll walk you through the most impactful features. 
- Explore our Company Landing Pages, offering a comprehensive view of ESG risk profiles, including detailed performance metrics, historical data, and peer to peer comparisons. 
- Discover how our advanced Reporting and Analytics Tools enable you to assess ESG risks across portfolios, apply custom screening criteria, and generate tailored reports. 
- Learn from examples of organizations that have successfully leveraged our tools to drive long-term value creation. 

This demo is crafted to give you first-hand knowledge of how our ESG Data solution can be a catalyst for informed decision-making. We will conclude with a Q&A session to address your specific questions and concerns.

Enhance portfolio management with ESG Data

2024 is shaping up to be a banner year for ESG regulation, with many reporting deadlines in play. How can you turn regulation from a reporting burden into an opportunity for differentiated product creation, and what does the future hold for the regulatory landscape?  

In this virtual “ask me anything” event, our regulatory experts will be on hand to share insights on the current state of the regulatory landscape, addressing greenwashing, and a practical walkthrough of how to leverage data with a company example.  
 
After a quick panel conversation, the floor is yours! Send your questions in advance or ask us anything on the call. This is a rare opportunity to ask all your burning questions on the regulatory landscape and how Sustainalytics’ regulatory solutions can meet your needs. 

Presenters:  
Ruthann Bartello, Director, Product Strategy, Morningstar Sustainalytics 
Hortense Bioy, Head of Sustainable Investing Research, Morningstar Sustainalytics 
Lisette Brackel, Senior Product Manager, Morningstar Sustainalytics 
Arthur Carabia, ESG Research Policy Director, Morningstar Sustainalytics

Submit your questions in advance:  

https://forms.office.com/Pages/ResponsePage.aspx?id=-wLT0u8Kc0eUpXlQxvZKNWFM1BmtmvNCmZ2_GDohHxVUQzhPV1NXWEFUODJJTUJFQkNLS1RHSEoxUi4u

Beyond Regulatory Reporting: An Ask Me Anything with Sustainalytics’ Regulatory Experts

The Water Use – Supply Chain Material ESG Issue (MEI) focuses on how companies utilize water and manage associated risks within their production processes and supply chains. The sustainable utilization of freshwater, a finite natural resource, gains significance amidst escalating global water scarcity. Projections from the United Nations warn of a potential 40% water deficit by 2030. 

Identifying Risks: Factors Contributing to Water Vulnerabilities 
Water risks predominantly arise from a company's reliance on water for internal processes and raw material production. Sectors such as mining, agriculture, and semiconductor manufacturing exhibit heightened water intensity. 

Navigating Geography: Contextualizing Water Risks 
Assessing a company's water risks necessitates consideration of its facility and supplier locations. Factors influencing water availability encompass water reserve presence, permit requirements, water network quality, and local water demands. 

Hotspots of Concern: Focusing on Water-Stressed Regions 
Particular attention is warranted for companies operating in water-stressed areas like portions of Chile, the United States, and Australia, where water scarcity exacerbates risks. 

Stewardship Strategies: Mitigating Water-Related Risks 
Companies committed to water stewardship are better equipped to mitigate water risks. Embracing an adaptive business model entails water risk assessments, supplier and community engagement, and the implementation of water recycling systems.

Water Scarcity and Sustainable Usage

The Raw Material Use Material ESG Issue (MEI) focuses on a company's efficient utilization of raw material inputs (excluding energy and petroleum-based products) in production, along with the effective management of associated risks. 

The Growing Importance of Raw Material Use: A Key Component in Decarbonization 
- The demand for raw materials is set to nearly double by 2050 due to population growth, rising living standards, and the low-carbon transition that will see widespread and increasing use of low-carbon technology. While physical scarcity serves as the upper limit of raw materials availability, accessibility issues related to the unequal spread of raw materials across countries and high cumulative demand for raw material inputs are becoming more prevalent. 
Although global market trade in commodities can overcome availability issues for raw materials that cannot be sourced locally, it also introduces a slew of factors that heighten environmental, social and corporate governance (ESG) risks. 
 
Subpar sovereign governance practices (bribery and corruption) and geopolitical tension (trade disputes, export bans or conflict) provide another dimension of risk, particularly where raw materials are supplied by only a few commodity-producing nations. 
 
Transparent and responsible production of raw material inputs is essential to de-risk investments.

Efficient Raw Material Use: A Key Environmental Focus

The Resilience Material ESG Issue (MEI) emphasizes financial stability and risk management in the financial services industry, particularly focusing on compliance with capital requirements. 

The Legacy of the 2008 Financial Crisis 
- Financial institutions must ensure resilience to avoid external costs to society in the event of bailouts funded by taxpayers. 

Regulators have strengthened global capital and liquidity standards post-2008 crisis, examining capital buffers amid ongoing challenges like the Covid-19 pandemic.  

Evaluating Risk Management Practices 
- Morningstar Sustainalytics' ESG Risk Ratings evaluates both inherent risks and management practices related to systemic risk management and capital adequacy. 

Regulatory changes post-2008 crisis highlight the importance of bank resilience. Utilizing our ESG Risk Ratings framework, investors can identify companies managing these risks effectively.

Building Financial Resilience

The Product Governance Material ESG Issue (MEI) focuses on how companies manage risks related to product quality, service safety, and responsible marketing. 

Maintaining Customer Trust 
- Ensuring product safety and reliability is critical for customer satisfaction and long-term profitability. Active oversight demands access to reliable data and collaboration across the business. 

Evaluating Product Governance Risks 
- Morningstar Sustainalytics' ESG Risk Ratings assess product governance risks, combining inherent risks with those not actively managed due to lacking programs and policies. 

As awareness of product governance risks grows, companies face increased scrutiny. Morningstar Sustainalytics' ESG Risk Ratings help investors identify companies managing these risks effectively.

Prioritizing Product Quality and Safety

The ESG Integration – Financials Material ESG Issue (MEI) encompasses all ESG integration activities in financial institutions, spanning investments, lending, and product offerings. 

Meeting Global Investment Goals 
Initiatives to integrate ESG factors into finance are driven by global sustainability goals, requiring significant private capital investment. 

Evaluating Financial Sector ESG Risks 
Morningstar Sustainalytics' ESG Risk Ratings assess ESG integration in financial institutions, considering business model risks and management practices. 

Regulators and stakeholders scrutinize companies' ESG efforts. Firms must integrate ESG considerations into business models and products while supporting clients in responsible investment practices. 

Using Morningstar Sustainalytics' ESG Risk Ratings, investors can identify companies managing ESG integration risks effectively.

Integrating ESG: Financial Sector Impact

The Occupational Health and Safety Material ESG Issue (MEI) focuses on managing workplace hazards for employees and contractors, prioritizing safety measures. 

Workplace health and safety lapses not only impact employees but also carry significant costs for businesses, as highlighted by studies like the 2020 Workplace Safety Index. 

Evaluating Occupational Health and Safety Risks 
- Morningstar Sustainalytics' ESG Risk Ratings assess occupational health and safety risks, combining inherent risks with those not addressed through systems and policies. 

The Covid-19 pandemic underscored the importance of prioritizing workplace health and safety. Morningstar Sustainalytics' ESG Risk Ratings helps investors identify companies equipped to manage these challenges effectively.

Ensuring Workplace Safety

The Land Use and Biodiversity Material ESG Issue (MEI) focuses on how companies manage the impact of their operations on land, ecosystems, and wildlife, covering land conversion, rehabilitation, forest management, and biodiversity protection. 

Assessing Environmental Challenges 
- Concerns over land use, biodiversity, and deforestation are increasingly prominent. Reports highlight significant forest loss and accelerating species extinction rates, with implications for the global economy and health. 

Morningstar Sustainalytics' ESG Risk Ratings assess companies' exposure and management of land use and biodiversity issues through subindustry-specific indicators. This includes evaluating deviation from default exposure and management effectiveness in areas like biodiversity programs and deforestation policies. 

Deforestation's Global Impact 
- As ESG investing expands, attention to land use and biodiversity issues grows. Shareholders can contribute to better management through engagement and voting initiatives, recognizing the impacts on the economy, food system, and climate.

Navigating Land Use and Biodiversity

The Human Capital Material ESG Issue (MEI) focuses on effectively managing human resources, addressing skilled labor scarcity, career development, and labor relations aspects. 

Unleashing Value through Human Capital 
- Human capital is a key asset driving company value. A well-managed workforce supports growth, while neglecting employees may lead to decreased productivity. Research shows a correlation between employee satisfaction and shareholder returns. 

Analyzing Unmanaged Risks in Human Capital 
- Morningstar Sustainalytics' ESG Risk Ratings assess a company's human capital management, including risks not actively managed through policies and programs. 

In a rapidly evolving digital landscape, companies must adapt to remain competitive and create sustainable value. Success depends largely on effective human capital management. 

Using Morningstar Sustainalytics' ESG Risk Ratings, investors can identify companies exposed to human capital risks and evaluate their risk management strategies.

Maximizing Human Capital: Prioritizing ESG Impact

The Human Rights Material ESG Issue (MEI) focuses on how companies uphold fundamental human rights within their operations, including civil, political, and economic rights, as well as protections against child and forced labour. 

Spotlight on Human Rights Challenges 
Human rights have long been a central concern for companies, prompting regulatory frameworks and increased consumer and investor awareness. Scrutiny of companies like Boohoo PLC in 2020 highlights the importance of addressing human rights practices in supply chains. 

Evaluating Human Rights Risks 
ESG Risk Ratings for Human Rights MEI assesses inherent risks in a company's business model and operations, alongside risks from inadequate implementation of relevant programs and policies. 

With growing awareness among investors, regulators, and consumers, companies face heightened scrutiny over human rights risks. Our ESG Risk Ratings framework helps investors identify companies most exposed to this issue and evaluate risk management effectiveness.

Upholding Human Rights: Managing ESG Impact

The Environmental and Social Impact of Products and Services Material ESG Issue (MEI) evaluates how companies manage the environmental and social impacts of their products and services, considering aspects from input materials to use, disposal, and recycling. 

Understanding Environmental and Social Impact Management 
As regulations and consumer demand for sustainable products grow, companies face both risks and opportunities in addressing environmental and social impacts. 

How Morningstar Sustainalytics Evaluates Companies on the Environmental and Social Impact of Products and Services 
By leveraging our ESG Risk Ratings framework, we score companies based on a set of subindustry-specific exposure and management indicators. Our assessment considers whether a company sells products with known human and environmental concerns and evaluates their commitment to sustainable products. Depending on the subindustry, we scrutinize management practices related to product stewardship and participation in relevant industry initiatives.

Assessing Environmental and Social Impact: Evaluating Products and Services

The Carbon – Products and Services Material ESG Issue (MEI) evaluates how companies handle energy efficiency and GHG emissions during product and service use, excluding financial services, which are assessed separately. 

A significant portion of global GHG emissions stems from energy production and usage, impacting sectors like transportation and manufacturing. Companies in these sectors face risks associated with consumer-use carbon emissions. 

Legal and regulatory challenges contribute to the rise in incidents related to product and service carbon impacts. Companies with high carbon portfolios face reputational risks and regulatory scrutiny. 

Regulatory Shifts and Corporate Responsibility 
Governments respond with regulatory measures to curb carbon impacts, such as fuel economy requirements and the shift to electric vehicles. Oil and gas sectors address emissions through clean fuel standards. 

Evaluating Unmanaged Carbon Risks 
Morningstar Sustainalytics' ESG Risk Ratings integrate business model risks and management practices effectiveness related to carbon impact, aiding investors in identifying vulnerable companies and assessing risk management efficiency.

Navigating Carbon Impacts: Evaluating Product and Service Use

The Carbon – Own Operations Material ESG Issue (MEI) examines how companies handle their Scope 1 and 2 greenhouse gas emissions, with consideration for parts of Scope 3 emissions like transport and logistics. 

Unchecked greenhouse gas emissions, particularly carbon dioxide, drive climate change, posing systemic risks to the economy and society. Managing carbon risk amid transitioning business models is essential. 

Morningstar Sustainalytics' Carbon Own Operations MEI assesses a company's exposure and management of transition risks through tailored policies and programs. 

Navigating Regulatory Landscapes for Decarbonization 
As global carbon budgets tighten, companies failing to manage carbon risk face increased exposure to regulatory frameworks and operational costs. Effectively addressing carbon issues is critical for future resilience.

Understanding Carbon Risk Dynamics

The Emissions, Effluents, and Waste Material ESG Issue (MEI) focuses on managing emissions and waste from company operations, excluding greenhouse gases. The emphasis on particular waste streams varies depending on the subindustry.  

Trends in Environmental Regulation 
Environmental regulations are tightening due to heightened societal awareness and scientific understanding of pollution impacts. Companies face legal and reputational risks, including for legacy pollution issues like groundwater contamination. 

Courts globally are holding companies accountable for environmental violations, with increasing enforcement actions seen, exemplified by India's National Green Tribunal. 

Corporate Responsibility Amid Rising Environmental Standards 
As pollution concerns grow, companies must navigate stricter regulations and public expectations. The US EPA's rising enforcement actions reflect a global trend toward stronger environmental standards.

Managing Environmental Impact

The changing economic environment has put more strain on investors, leading to further scrutiny of the strategies and factors they use to make investment decisions. This is especially true for ESG factors, where investors are facing increased pressure from new regulations and compliance policies. As a result, investors are paying more attention to the underlying sources of performance and risk in their portfolios. In a recent study created in partnership with Natixis Investment Management Solutions, we examined the impact of ESG risk on portfolio performance and financial health. We uncover that reducing ESG risk is beneficial for performance and risk mitigation across all regions we sampled.  

Join us for a practical discussion, which explores the performance and risk attribution analysis providing actionable insights for investors constructing ESG-based portfolios.  

Learn how to effectively integrate ESG considerations while mitigating common risk factors to optimize investment strategies for a sustainable future.  

Speakers:   
- Aymen Karoui, Director of Methodology & Product Architecture, Morningstar Sustainalytics  
- Elpida Louka, Natixis Investment Managers (NIM) 
- Piotr Podgorny, Natixis Investment Managers (NIM) 
Moderator: 
- Adam Fleck, Head of Research, Morningstar Sustainalytics

Distilling the ESG Signal for Enhanced Performance and Downside Protection

climate risk

transition risk

transition plans

Risk Management

Investment Strategy

Investment Management

Asset Management

Risk Mitigation

Risk Assessment

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Distilling the ESG Signal for Enhanced Performance and Downside Protection

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