Asset owners assemble to foster ESG growth

Japan's Government Pension Investment Fund teams up with CalPERS, PGGM and others to promote Environment, Social and Governance (ESG) investing.
By Jonathan Watkins
A new forum containing some of the world’s largest asset owners has been established to promote Environment, Social and Governance (ESG) investing.

The forum was established by Japan’s Government Pension Investment Fund (GPIF) – one of the largest in the world – to accelerate its progress on ESG through the exchanging of opinions.

GPIF will be joined by the largest pension fund in the US, the €270 billion California Public Employees’ Retirement System (CalPERS), along with the California State Teachers’ Retirement System and Dutch schemes PGGM and APG.

The forum will include 20 non-Japanese asset owners in total.

ESG investing is becoming increasingly popular around the world with asset owners, with custodians in every region now facing a new set of challenges in response to the growing demand.

Ed Fruscella, VP global risk solutions at BNY Mellon, explained in Global Custodian’s summer issue that the custodian bank had seen its ESG business increase by around a third in the last three years.

A State Street report from February entitled “Pensions with Purpose: Meeting the Retirement Challenge”, found that 83% of pension professionals globally expect moderate-to-high levels of interest in ESG investing from the schemes they work for over the next three years. Additionally, 76% said they would be more likely to hire a fund manager with ESG capabilities, than one without.

Norihiro Takahashi, president of GPIF, said that he hoped the fund could “contribute to sustainable growth” and foster the “corporate value of investee companies through optimising the investment chain”.