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Fundamentals of ESG Investing (Virtual Classroom)

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Introduction

This online training is being delivered live in four 4-hour sessions which run from 13:00 – 17:00 London (UK).

You can learn more about our virtual, online courses and how they work on our course FAQ page. Or view our Virtual Classroom schedule to see what else is being delivered live in our online classrooms. If you don’t see the [topic name here] training topic, you are looking for, or if you would like an online classroom in another time zone, please tell us.

According to a February 2021 Bloomberg Intelligence report, global ESG-based investment assets will top USD50trn by 2025, when total global assets under management (AUM) will reach USD140trn. These staggering forecasts underline the importance attributed to this fundamental change to investment management.

This programme offers the informed beginner eight sessions packed with information and opportunity to ask questions and discuss answers.

The first session outlines the breadth and depth of ESG-based investments in terms of types of asset owners, types of funds and size of investment portfolios (AUM).

The following three sessions (2, 3 and 4) describe, contrast and debate the six different ESG strategies professional investors apply in practice.

Session five looks at how traditional equity investment analysis changes as a result of ESG elements in the portfolio. A major element in this session is the debate around how the perpetuity element in CAPM valuation will change and how to quantify it.

Session six asks the same question as in session five, only this time focusing on fixed income investment analysis. It is reasonable to assume that bond spreads will change, thus driving valuation changes, but how will this process be driven? This will be debated in class.

Session seven discusses the use of ESC indices in portfolio allocation and performance appraisal. A small number of actual index calculations will be performed for illustration.

The final session brings participants to discuss practical approaches to managing ESG investment risk in a portfolio, whether by controls, guidelines or sanctions.

This course can be taken with Basics of ESG Investing (2 x 4hr sessions).

Learning Objectives

After this course, participants will be able to:

  • describe the size of and the players in the ESG investment market
  • discuss positive and negative screening strategies and to which extent they lead to portfolio tracking errors
  • explain the main benefits and several disadvantages of integrating ESG fully into existing investment portfolios
  • describe ways investment managers can exert direct ESG influence over companies through impact investing or active ownership
  • discuss corporate ESG activity as either an excess cost or an insurance premium when analysing returns
  • analyse corporate CDS and credit spreads in light of ESG exposure and determine whether bond ratings are sustainable
  • explain the composition of an ESG-based investment index and describe a broad range of index families
  • explain the extent to which an investor is exposed to ESG investment risk, when investing in non-compliant securities

Who Should Attend

  • Fund accountants
  • Fund administrators
  • Portfolio analysts
  • Performance attribution managers
  • NAV reporting staff
  • Wealth management sales staff
  • Corporate bankers operating in the ESG space
  • Any IMC certificate holder, who wishes to improve their ESG skills

Topics

  • Overview of ESG Investment Activity
    • NBIM – The Norwegian Oil Fund
    • Morningstar Sustainability Investment Funds Screener
    • Bloomberg predictions for ESG AUM by 2025
    • Largest dedicated ESG funds
  • Exclusionary vs Positive Screening
    • Is exclusionary screening the same as ‘cancel’ culture?
    • Supply chain analysis by major industry – Scope 1 vs 2
    • Does screening destroy or enhance ‘asset allocation’?
    • Is positive screening only practical for dedicated portfolios?
    • Tracking error
  • ESG Integration and Thematic Investing
    • Full integration - Higher returns with lower ESG risk?
    • Data quality challenges
    • Prediction of timing and frequency of ESG events
    • Analyst expertise in the securities selection process
  • Impact Investing and Active Ownership
    • What is impact investing? Examples
    • Proxy voting and shareholder resolutions
    • Engagement with companies vs class-action lawsuits
    • ‘Wall Street Walk’ threat vs hedge fund activism
  • Equity Analysis with ESG Exposure
    • ESG cost seen as a reduction in profitability
    • ESG seen as an insurance against corporate disasters
    • Calibrating the perpetuity element in DCF valuation
    • Converting waste into resources (example: desalination)
  • Fixed Income Analysis with ESG Exposure
    • Are traditional bond ratings sustainable?
    • Bond valuation under ESG uncertainty – what gives?
    • Analysis of ‘Green’ bonds
    • CDS and credit spread behaviour through an ESG lens
  • Construction and use of ESG Indices
    • MSCI ESG Index family
    • S&P DJI Index family
    • Examples of ESG index calculations
    • Performance comparisons to non-ESG indices
  • Measuring and Managing ESG Investment Risk
    • How to deal with potential exposure to sanctions and fines
    • What is the investment cost of a corporate ESG breach?
    • Adherence to fundamental operational risk principles
    • Assess internal controls, guidelines and sanctions

Teaching Method

  • Group live instruction and illustrative examples
  • The program is highly interactive and will encourage participation through exercises and case studies that the delegates will solve individually or in small workgroups. These activities are designed to allow delegates to practise and to consolidate the concepts that will be discussed during the lectured sessions of the program. The program will focus on the practical realities of the market, rather than taking an excessively mathematical or academic approach
  • All participants will receive digital copies of the presentation slides, handouts, and other course materials

Instructors

The instructor for this course will be drawn from one of our core faculty of subject matter experts. Further details will be published at the earliest opportunity.

Venue

Our seminars take place in 4 star professional conference facilities, generally in city-centre hotels like the Marriott, Sheraton or Hilton brands. Detailed Joining Instructions are sent to all registered delegates by email approximately one month before the event. The Joining Instructions will confirm exact venue details and nearby (or onsite) hotel recommendations with bedroom rates where available. Coffee and lunch will be provided.

CPE/CPD Accreditation

IASeminars is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

 

Field of study: Accounting

Prerequisites

Participants on the ‘Fundamentals of ESG Investing’ course are advised to complete the ‘Basics of ESG Investing’ course prior to attending or be previously exposed to the subject area at a basic level.