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The ESG Phenomenon - Northern Trust, ABN AMRO

Editorial Staff 29 January 2021

The ESG Phenomenon - Northern Trust, ABN AMRO

Developments and commentary in and around the ESG investment space.

Northern Trust
Northern Trust Asset Management has launched a “Green transition” index strategy. 

The strategy mixes Northern Trust’s proprietary environmental, social and governance exclusion approach with screens to minimize climate-related risks and include positions to exploit a shift to a low-carbon economy. 

The offering runs alongside the asset manager’s existing World Green Transition Index strategy, launched in 2019. The strategies use the MSCI World Index and the MSCI Emerging Markets Index as their parent indices. 

“Our strategy enables the incorporation of climate change considerations into a rules-based equity solution and revolves around five distinct climate-aware components to intelligently hedge the risks, and, importantly, incorporate the investment opportunities of tomorrow’s world,” Valeria Dinershteyn, senior sustainable investing strategist, for Europe, Middle East, Africa and Asia-Pacific at Northern Trust Asset Management, said. .
Screens applied include fossil fuel exclusions (with the strategy fully fossil-fuel free, excluding companies with fossil-fuel reserves, and energy screen, to minimize current and potential exposure to carbon emissions and reduce exposure to any other associated risks. Positive tilts are then applied to companies with green revenues and a strong climate strategy by using the innovative MSCI Transition Risk Management Score, the firm said. 

Northern Trust Asset Management oversees $1.1 trillion of investor assets (as of 31 December 2020).

Vlerick Business School, based in Ghent, Belgium, has teamed up with ABN AMRO in the country to push academic research into sustainable finance, tapping into the continued popularity of ESG investing.

The business school and the bank have inked a three-year partnership.

Dimitrios Kolokas, doctoral fellow at the school, will conduct the research. He received the “Researcher of the Year Award 2020” from Vlerick Business School on 15 January 2021. 

The partnership runs alongside other partnerships within ABN AMRO. As an example, Oxford University in the UK is conducting academic research, focusing specifically on “the effect of sustainability on SME’s” and “financial performances and risks”, supported by ABN AMRO.

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