Q6. ESG Investing (1,250 1,500 words in total)

As per the CFA Institutes Environmental, Social, and Governance Issues in Investing guide

https://www.cfainstitute.org/en/advocacy/policy-positions/environmental-social-and-governance-issues-in-investing-a-guide-for-investment-professionals

the practice of considering environmental, social, and governance (ESG) issues in investing has evolved significantly from its origins in the exclusionary screening of listed equities on the basis of moral values. A variety of methods are now being used by both value-motivated and values-motivated investors in considering ESG issues across asset classes.

1. Critically evaluate the factors behind the growth in ESG investing in recent years. (10 marks)

2. Using relevant examples, analyse any 3 methods for considering ESG issues in investing.

(9 marks)

3. Suppose you work for a large investment management firm which is about to launch an ESG fund aimed at retail investors in Ireland.

Design an appropriate ESG fund which you believe would be an attractive prospect. Explain briefly the key characteristics of the fund, but also critically discuss any limitations of ESG investing.

Note: You can benchmark this fund against those offered by firms such as

Fidelity https://www.fidelity.com/mutual-funds/investing-ideas/sustainable-investing or

Blackrock https://www.blackrock.com/us/individual/investment-ideas/sustainable-investing/sustainable-solutions or https://www.blackrock.com/ch/individual/en/themes/sustainable-investing or https://www.ishares.com/us/strategies/sustainable-investing and

Vanguard https://www.vanguardinvestor.co.uk/investing-explained/ESG-funds

(14.3 marks)

Total 33.3 marks

To help with expectations of standard of submission, following is a general set of Grade Descriptors as proposed by the NUI Senate.