ESG Frequently Asked Questions
Sources: CFA Institute, ESG Issues in Investing (2015)
There are a number of ESG standards and principles today.
Numerous institutions, such as the UN Principles of Responsible Investing (PRI), Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force of Climate-Related Financial Disclosures (TCFD) are working to form standards and definite materiality to facilitate incorporation of these factors into the investment process.
The evidence is that the long-term performance of ethical funds versus their conventional counterparts is neither better nor worse. There are good and bad ethical funds, just as there are good and bad conventional funds. However, ethical funds tend to focus on certain sections of the market and as a result do not track headline benchmarks such as the FTSE 100 Index. This means that ethical funds can go through periods of both under and out performance relative to these indices, but over the long-term there are reasons why these thematically driven funds could actually perform better, since they are designed to benefit from the opportunities created by climate change, resource pressures and demographic change.
Most ESG investments are designed to focus on solutions to social and environmental challenges. Clean technologies, renewable energy, healthcare, clean water, and waste management all require large amounts of capital, and through our portfolios we are helping to bring about the transition to a more sustainable future.
POEMS provides a wide range of ESG investment products.
For Funds and Exchange Traded Funds, you may use instrument screeners to filter ESG. For Funds, Visit https://unittrust.poems.com.sg/all-about-funds/fund-finder/ > Advance Criteria > Sector/Strategy > ESG.
For ETFs, Visit https://www.poems.com.sg/etf-screener/ > Fund name > Type ESG
The costs for trading publicly listed ESG ETFs is similar to trading stocks, where the cost incurred will differ according to your account type. More information can be found here: https://www.poems.com.sg/pricing/