• The coronavirus pandemic has shone yet more light on how investors allocate their money and how company operations influence our societies.
  • But there are questions about whether ESG is really effective in improving and supporting our communities. 
  • A portfolio manager told CNBC that companies can “hide” their actual carbon footprint by outsourcing parts of their production process.

Is sustainable investing just a marketing ploy?

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LONDON — There’s growing appetite to invest in a more sustainable way, but experts warn that transparency is needed in this space if it’s to really do any good for the planet.

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ESG (environmental, social and corporate governance) describes investments made with an aim to contribute to a better environment, society or workplace and it’s becoming increasingly popular. The share of global investors that have applied ESG criteria to at least a quarter of their total investments has jumped from 48% in 2017 to 75% in 2019, according to data from audit firm Deloitte.

And this is only expected to keep rising.

In the U.S. alone, professional investors could have 50% of their total investments in ESG assets in the next five years, data from Deloitte also showed.

“There is this increasing understanding in society that we need to care about the climate, about social conditions of employees,” Zacharias Sautner, a professor of finance at the Frankfurt School of Finance & Management, told CNBC last month via Zoom, adding that this is being reflected in the way investments are made.

The coronavirus pandemic has shone yet more light on how investors allocate their money and how company operations influence our societies. For instance, a number of multinationals have announced in recent months new measures to ensure a more equal workplace. 

But there are question marks on whether ESG is

By Joice Alves

LONDON, Oct 9 (Reuters)Rolls Royce RR.L shares on Friday were heading for their best weekly gain since listing in 1987 as the British aircraft engine maker’s plan to raise money to cope with the coronavirus travel crisis triggered bargain hunting among investors.

The value of Rolls Royce shares more than doubled in the last week to 228.90 pence, although that is still a far cry from the 690 pence they traded at before the coronavirus outbreak.

The company aims to raise a total of 5 billion pounds, including 2 billion from shareholders, to cope with a “worst case scenario”.

“(The recapitalisation plan) sets up Rolls-Royce sufficiently to navigate an uncertain recovery and removes any lingering concerns about liquidity – and even solvency,” said Berenberg analyst Andrew Gollan, keeping a “buy” rating on the stock.

Worries over a long-haul travel slump reduced Rolls Royce’s market value to just 3.8 billion pounds ($4.9 billion) from 20.5 billion pounds two years back.

“There is a clear willingness to go bargain hunting as traders begin to see the light at the end of the tunnel,” said Joshua Mahony, senior market analyst at IG.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said there has been “renewed retail investor interest” with Rolls Royce shares the most purchased by her clients in the week ending Oct. 8.

The Capital Group of Companies, a major investor, raised its stake in Rolls to 8.70% from 7.91% on Thursday.

Rolls Royce shares were up 17.8% on Friday by 1136 GMT, among the top performers on the pan-European STOXX 600 .STOXX index. Analysts said the stock still looked cheap.

($1 = 0.7723 pounds)

Rolls Royce’s roller coaster ridehttps://tmsnrt.rs/30O27wZ

(Reporting by Joice Alves; Editing by Kirsten Donovan)

(([email protected]; +442075422345; Reuters Messaging: [email protected]))

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