Leading academics and practitioners come together to reinvent how investors approach ESG investing
Partnership will build on Arvella’s investment friendly ESG framework which prioritizes investment returns, alongside impact
NEW HAVEN, Conn. and PARIS, Sept. 26, 2022 (GLOBE NEWSWIRE) -- The Yale Initiative on Sustainable Finance (YISF) has entered a partnership with Arvella Investments with a shared goal to mainstream sustainable investing by exploring how investors can use ESG to boost investment returns. YISF will become a research partner of ‘ESG for Investors’, the sustainable investment platform developed by Arvella.
ESG for Investors offers an investment framework and associated tools designed to help integrate ESG in portfolios, and has been developed in conjunction with fellow investors1 and scholars from top institutions.2
After a dramatic growth in ESG-labelled assets, ESG investing faces an unprecedented backlash. In Arvella’s view, two factors drive this backlash. First, investors have challenged weak analytical foundations of ESG investing, anticipating that it is likely to deliver subpar long-term investment returns. Second, the lack of meaningful real-world impact has fed greenwashing claims.
Arvella Investments’ Chief Investment Officer Benoit Mercereau says: “Arvella’s ESG for Investors platform provides the paradigm shift to address this backlash. Instead of asking how investors could have impact, it strives to use impact to help investors reach their traditional goal—which is to deliver superior risk-adjusted returns.”
“Unless investors believe ESG is more an opportunity than a risk, the scope of sustainable investing will be limited,” said Yale Initiative on Sustainable Finance Faculty Co-Director Todd Cort. “ESG for Investors offers a pathbreaking analytical framework on how investors can use ESG to boost investment returns. The Yale Initiative for Sustainable Finance team is thrilled about the opportunity to work on this innovative approach alongside Arvella Investments.”
The research and insights available through ESG for Investors offer exciting perspectives and opportunities to asset managers. Creating innovative investment strategies using Arvella’s framework – which covers all asset classes and geographies – could help them appeal to clients who want the best possible returns, while pleasing clients who want the best possible impact, too.
The potential financial upside is large, according to Arvella. Adopting best practices on just two key ESG issues can boost a firm’s share price by 22%, for example, ESG for Investors’ research suggests3. Associated potential impact can be large as well. Adopting best practices in waste management would reduce global waste by 72% and give shareholders a 5% windfall, on average, for example.