Skip to main content

Finding Value Through Thematic ESG Investing

Posted on February 3, 2017

Doug Morrow
Doug Morrow
Director Head of Portfolio Research

On January 25th Sustainalytics published 10 for 2017: Investment themes in a changing world, the fourth installment in our 10 for series. As the title suggests, the report looks at thematic ESG investing.

The 10 for report is something that I look forward to each year. It gives our thematic research team a chance to collaborate and exchange ideas with different teams across Sustainalytics, which is always an informative experience. The report also gives us a structured platform to comment on important trends that see developing over the next 12 months.

In previous years we have focused the 10 for report on individual topics. For instance, 10 for 2015 looked at the ESG implications of what was then the EU’s new quantitative easing program, and 10 for 2016 analyzed the historic adoption of the Paris Agreement at COP 21.

Thematic ESG investing for 2017

This year we took a broader perspective and outlined ten investment themes that we believe will be a source of growing value for investors in 2017 and beyond. Each chapter is a mini playbook for investors: we describe the key drivers of each theme, summarize the opportunity and identify a shortlist of companies that investors can use to get exposure to the theme.

The themes are highly topical and include energy storage, plant-based proteins, blockchain technology, autonomous vehicles and utility-scale solar. We also consider cybersecurity, management diversity, equitable drug pricing, new rules around executive compensation disclosure and tax avoidance.

When we set out to write 10 for 2017 at the end of last year, we sought to identify ways that (equity) investors could profit from many of the changes taking place in the economy, hence the subtitle of the report. These changes, which are already well-known to ESG investors and increasingly recognized by the market as a whole, include the increasing cost competitiveness of renewable energy, the growing connectedness of people and products, rising consumer demand for sustainable products and tightening disclosure requirements for listed companies.

As I do not see any of these trends abating any time soon, it is my hope that 10 for 2017 stimulates ideas and discussion about how to find investment value in our rapidly changing world.

Want to know more? Click here to download the report and register for the webinar on 9 February 2017.

Recent Content

Double Trouble: The Rise of Greenwashing and Climate Litigation for Banks

The fight against greenwashing is being taken to the courts. An analysis of Morningstar Sustainalytics data shows a 12-fold rise in climate-related litigation, including greenwashing claims, against banks over the past three years.

Hamburger, fries and dipping sauces on a red background

Big Food’s Broken Promises: The Data Behind the Food Industry’s Rising Emissions

Using Low Carbon Transition Ratings data, we look at six major food companies and identify where they need to go beyond targets to meet their stated net-zero goals.

CSRD Reporting: Preparing for Mandatory ESG Disclosure Deadlines

The implementation of the EU’s Corporate Sustainability Reporting Directive (CSRD) appears to be a watershed moment with implications for companies both in Europe and beyond.

Aerial photo of clear cutting in Amazon rainforest

Constructing Zero Deforestation Portfolios to Combat Climate Change and Biodiversity Loss

The world’s forests are under threat, putting ecosystem services and global economic wealth in danger. But investors can help to fight deforestation. In this article, learn the reasons why investors should pursue zero deforestation portfolios.