Dealflow | January 26, 2017

Institutional investors are differentiating themselves with ESG

The team at


Stock market research firm MSCI says investors will differentiate themselves in 2017 by looking for non-financial data and long-term performance. Rising risks mean governance factors are key in pricing bonds. Utilities may spin off renewables to attract low-carbon investors. And new pay-ratio data may tilt institutions away from companies with excessive CEO compensation.

A flurry of new products from major asset managers also suggests investors are looking at ESG (environmental, social, governance) signals in assets classes other than public equities, including corporate bonds and real estate. PIMCO, for example, is offering a new global bond ESG fund, while Northern Trust Asset Management is rolling out a sustainable real estate index.