Press Room

Turning Green Into Gold Takes a Leap of Faith“As ever in the world of environmental, social and governance standards, it’s not hard to find opposing evidence to the UBS findings. The EDHEC Business School’s Risk Institute, for example, argued last month that institutional ownership has little effect in curbing greenhouse gas emissions by companies. The EDHEC study used carbon-intensity data on more than 7,000 companies between 2007 and 2018, examining the relationship between their carbon footprints and their ownership by fund managers with combined assets of more than $70 trillion who participated in the 2018 United Nations’ Principles for Responsible Investments survey." See more Active ownership as a tool of greenwashing“When asset managers are criticized for the vast greenwashing happening in financial markets (EDHEC, 2021), the answer is often that greenwashing is only an issue for passive investments, while active strategies – particularly active ownership – can fix all these problems. Investors preoccupied with climate change can be “active owners” and influence the carbon footprint of investee companies by voting at shareholder meetings on climate-related issues and by actively engaging with executives and board members. We study to what extent institutional investors’ ownership affected corporate carbon emissions in 68 countries for the period from 2007 to 2018 and find that institutional investment on average does not appear to lead to any tangible carbon footprint reduction." See more Stay or sell? The $110tn investment industry gets tougher on climate“This is backed up by research. A study by academics at Edhec Business School found that while institutional investors claim they are actively engaging with companies on climate issues, this is not followed by an actual decrease in the carbon footprint of those businesses. “[Investors] are unlikely to play a major role in the low carbon transition unless their active ownership becomes more effective,” the authors wrote. " See more Financial risk assessment and management in times of compounding climate and pandemic shocks“Despite all the noise, the engagement efforts of asset managers had no effect on greenhouse gas emissions over the past decade. That’s one damning finding in research by Gianfranco Gianfrate, professor of finance at Edhec-Risk Institute, who has described greenwashing in the investment industry as a “weapon of mass destruction”. “Major [investment firms] are claiming to integrate sustainability into their stewardship and fund management”, said Gianfrate, “but they distract [end] investors, pretending they are doing what they are not doing.” Engagement is one of the industry buzzwords the professor focusses on. “All top asset managers are doing some greenwashing," he said. "[They] want the largest possible universe of securities to invest in, so don’t like to divest but ‘engage’. See more Greenwashing by major polluters and investors inflicting "mass destruction"“Despite all the noise, the engagement efforts of asset managers had no effect on greenhouse gas emissions over the past decade. That’s one damning finding in research by Gianfranco Gianfrate, professor of finance at Edhec-Risk Institute, who has described greenwashing in the investment industry as a “weapon of mass destruction”. “Major [investment firms] are claiming to integrate sustainability into their stewardship and fund management”, said Gianfrate, “but they distract [end] investors, pretending they are doing what they are not doing.” Engagement is one of the industry buzzwords the professor focusses on. “All top asset managers are doing some greenwashing," he said. "[They] want the largest possible universe of securities to invest in, so don’t like to divest but ‘engage’. See more Climate ETFs do little to decarbonise the economy, report finds“Climate change-related ETFs overstate their virtues while doing little to incentivise emissions reduction in the global economy, according to research conducted by EDHEC-Risk Institute. While examining ETFs tracking “low carbon”, “Paris-aligned” and “climate change” indices from commercial providers such as MSCI, S&P Dow Jones Indices and FTSE Russell, the report, titled Doing Good or Feeling Good? Detecting Greenwashing in Climate Investing, found green-labelled products were allocating more heavily to companies with deteriorating climate performance than those with a key role in decarbonising the economy. See more Placements immobiliers : pourquoi il faut, plus que jamais, diversifier ses SCPI“Une récente étude du centre de recherche EdhecRisk Institute et de la société de gestion Swiss Life AM, réalisée sur un échantillon de 53 SCPI représentatives du marché entre 2003 et 2019, démontre les bienfaits de l'exercice. Si ce nombre n'est pas inaccessible, il reste élevé étant donné les montants minimums de souscription requis. Pour un épargnant avec un budget de quelques milliers d'euros, cet objectif sera difficile à atteindre. « Les effets de la diversification se font ressentir très vite dès lors qu'on ajoute un produit supplémentaire à son portefeuille », rassure toutefois Shahyar Safaee, chercheur au sein de l'EdhecRisk Institute et coauteur de l'étude." See more Les investissements responsables sont-ils plus risqués ?“Dans une enquête réalisée durant le premier semestre 2020 auprès d’investisseurs professionnels par l’Edhec Risk Institute, centre de recherche en gestion d’actifs et en management, la majorité des répondants* estime d’ailleurs que l’intégration des critères environnementaux, sociaux et de gouvernance permettrait de réduire « l’exposition au risque de long terme »." See more Managing ESG risks in sovereign bond portfolios“Having an impact? Lionel Martellini, professor of finance at EDHEC Business School, analyses the effect of incorporating ESG factors within the sovereign bond segment of portfolios.In a recent paper (Martellini and Vallée, 20211), we explore the impact of ESG factors on the risk and return of sovereign bonds from an investor perspective, in particular investigating how to measure and manage EGS risks in sovereign bond portfolios and their implications for sovereign bond portfolio strategies." See more Q&A: Understanding carbon pricing“An increasing number of companies are looking at internal carbon pricing for risk management as well as supporting climate policy. But what is it and how does it work? Professor Gianfranco Gianfrate, professor of finance at EDHEC Business School, answers ESG Clarity Intelligence‘s questions. How does internal carbon pricing work? An increasing number of global companies are adopting internal carbon pricing—also referred to as “shadow carbon pricing”— to make key decisions about their daily operations and long-term business models. See more ESG outperformance narrative ‘is flawed’, new research shows“ However, fresh analysis by Scientific Beta, a “smart beta” index provider linked to the Edhec Research Institute, a French academic think-tank, disputes the claims that ESG funds have tended to outperform the wider market, or, in industry jargon, generate “alpha”.  Most ESG investing is little more than a marketing trick. The message is not ‘ignore ESG’ but rather ‘do not buy the narrative of ESG outperformance’ Sony Kapoor, Nordic Institute for Finance, Technology and Sustainability “There is no ESG alpha,” said Felix Goltz, research director at Scientific Beta and co-author of the as yet unpublished paper, “Honey, I Shrunk the ESG Alpha”. See more L’ESG ne profite pas à l’obligataire souverain comme aux actions“Les emprunts d’État intégrants les critères durables sont moins performantes pour les investisseurs mais plus économiques pour leurs émetteurs, selon l’EDHEC-Risk Institute. Les actions affichant les meilleurs scores environnementaux, sociaux et de gouvernance (ESG) enregistrent les meilleurs rendements sur le long terme par rapport aux actions non-durables. Ce qui n’est pas le cas des obligations souveraines. Dans une étude parue la semaine dernière, l’EDHEC-Risk Institute observe en effet que l’incorporation de critères ESG implique un coût d’opportunité par rapport à ce qui serait obtenu à partir d’un placement traditionnel optimal non-durable." See more Europe’s most SFDR-friendly asset managers“Gianfranco Gianfrate, a professor of finance at business school Edhec, says partial or delayed disclosure is “greenwashing”. “Asset managers are suddenly overwhelmed with a flurry of sustainability-related voluntary and discretional reporting requests and [so] missing the first SFDR cut of March 10 is excusable to a certain extent. “However, partial or delayed ESG disclosure is definitely a form of greenwashing.”” See more Greenwashing in finance: Europe’s push to police ESG investing“Demographics are moving in favour of this revolution,” says Gianfranco Gianfrate, professor of finance at Edhec Business School in France. “The younger generations are really into sustainability and the environment and this translates into the products they are buying,” he says. “Covid amplified this interest.” See more EDHEC Business School Launches MSc In Climate Change & Sustainable Finance“There are lots of opinions on climate change, but it's extremely useful that we look at hard facts and scientific evidence to come up with informed decisions,” explains Lionel Martellini, professor of finance and director of EDHEC’s Risk Institute. There are two central questions at the heart of the program: first, understanding the impact of investment decisions on climate change; secondly, understanding the impact of climate change on investment decisions. See more The inflation dragon is threatening a comeback"Nobody is looking at inflation. I believe that everybody should be looking at nothing else,” says Riccardo Rebonato, Professor of Finance at EDHEC Business School and EDHEC-Risk Institute. “The world was obsessed by inflation in the 1970s-1980s, and completely forgot about it in the new century.” The unprecedented build-up in liquidity due to government spending and debt issuance to fight the economic impact of the pandemic will soon see economies take off and prices rise as the vaccines return life to normal. The scale of central banks’ response to coronavirus, combined with a huge fiscal stimulus like Biden’s proposed US$1.9trn COVID-19 relief bill, is going into the pockets of firms and people, rather than just the banking system. See more Book Review: Advances in Retirement Investing"This is an essential source for cohesive retirement investment strategies based on the accumulation and decumulation of wealth, viewed as a continuum. It compares and contrasts its strategies with those of traditional investments used for retirement, such as target date funds, balanced mutual funds, and annuities. It suggests the launch of new forms of retirement investment solutions that better serve the goal of generating replacement income than do existing products with a retirement label.” Copyright Enterprising Investor - CFA Institute See more Les critères ESG suscitent un intérêt grandissant chez les investisseurs"Dans une enquête réalisée par l’Edhec, la majorité des répondants estime que l’intégration des critères environnement, social et gouvernance permet de réduire l’exposition au risque de long terme. Depuis 2006, l'EDHEC-Risk Institute réalise annuellement une enquête en Europe portant notamment sur l'utilisation des ETFs, les fonds qui reproduisent l'évolution d'un indice boursier et qui se négocient en bourse comme un titre ordinaire.” Copyright La Tribune See more Indexing, Climate Impact and Beyond"Absolutely, and increasingly so. In a survey conducted by EDHEC-Risk as part of Amundi’s research chair, almost 60% of respondents highlighted the environment as the most important dimension of ESG. And, more specifically, almost a third of respondents were looking for ETF providers to deliver more climate solutions.” Copyright Portfolio Institutional See more How European investors consider introducing ESG with ETFs and in factor investing"Véronique Le Sourd, senior research engineer at EDHEC-Risk Institute,analyses the latest trends from across the ESG ETF space following the release of the firm’s survey annual factor investing survey.” Copyright ETF Stream See more Half of EDHEC-Risk Alternative Indexes positive in September"Half of the EDHEC-Rosk Alternative Indexes achieved positive performances in September, with Short Selling ending the month as the best performing strategy (1.39 per cent), followed by Merger Arbitrage (0.83 per cent) and Fixed-Income Arbitrage (0.79 per cent).” Copyright HedgeWeek See more Dealing with Distortions: Risk in the Covid Era"Investors and risk managers are staring into the abyss. Unable to use past asset pricing models to predict the immediate future they are, says Professor Riccardo Rebonato of EDHEC Business School, hamstrung by a toxic combination of politics, the current global crisis and asymmetry of risk. This, he says, is the time they should look for ‘the best-looking horse in the soap factory’ to help them at least stay in the race.” Copyright Treasury Management International See more SRI/ESG at the expense of smart beta"Nearly 40% of all investments in European sustainable and socially responsible funds go through ETFs, with which institutional investors are satisfied. According to the latest statistics from the ETFGI consulting firm, globally listed smart beta ETFs in the equity category suffered a net outflow of $2.2 billion in July. This brings net inflows to only 10.36% in the first seven months of the year. EDHEC’s latest survey of the European exchange-traded fund (ETF) market confirmed the special and increasingly central place occupied by socially responsible investments (SRI) based on ESG criteria. See more EDHEC-Risk ETF survey focuses on ESG"The EDHEC-Risk Institute has announced the results of the 13th EDHEC European ETF, Smart Beta and Factor Investing Survey, a comprehensive survey of 191 European ETF and smart beta investors, conducted as part of its Amundi research chair on “ETF, Indexing and Smart Beta Investment Strategies”. This survey, conducted since 2006, aims to provide insights into European investors’ perceptions, practices and future plans in the domain of ETFs and Smart Beta. The 2020 edition presents a new focus on SRI/ESG investing.” Copyright ETF Express See more Avoiding ‘sin stocks’ is no longer enough for ESG ETFs"Positive screening was the preferred approach for 45 per cent of investment professionals surveyed by Edhec Risk Institute in a report published on Thursday. That compares with just 30 per cent who preferred thematic approaches — restricting investment choices to companies that score highly on gender diversity, or to those producing green energy for example — and 25 per cent who said they would opt for the simple exclusion, or negative screening, approach. See more Which areas do investors want to see further ETF product development?"ESG and low carbon ETFs were cited as the top two areas where investors would like to see further product development, according to the latest EDHEC-Risk Institute survey. The survey, which interviewed 191 European ETF and smart beta investors in partnership with Amundi, found 43.2% of respondents cited further product development in the ESG ETF space, a 12.7 percentage point increase from 2019. Meanwhile, 30.8% of investors cited low carbon ETFs as another area, an 8 percentage point increase and second on the list having been just tenth in 2019.” Copyright ETF Stream See more Principal Director of Investment Strategy at PGGM appointed as new chairman of EDHEC-Risk Institute’s international advisory board"EDHEC-Risk Institute has appointed Jaap van Dam as chairman of its international advisory board. Van Dam is the Principal Director of Investment Strategy at PGGM in the Netherlands. PGGM is a leading Dutch pension administrator with roots in the healthcare and social work sectors. It manages about EUR268 billion (USD329 billion) in pension assets for more than 2.5 million Dutch participants. PGGM provides services in pension fund management, comprehensive asset management, management support, and policy advice to various pension funds.” Copyright Institutional Asset Manager See more EDHEC and MINES launch Sustainable Finance degree"Lionel Martellini, Director of the EDHEC-Risk Institute and Professor of Finance at EDHEC Business School, similarly expressed his anticipation at the benefits that this new double degree will provide to the international landscape of climate change finance.” Copyright Global Education Times See more Strategic Plan For A Sustainable Business School"For 20 years, EDHEC has focused on research that strongly impacts both the academic and business worlds while generating a virtuous economic circle for the school. In 2021, our triple-accredited, top-ranked MBA programme will be celebrating the 60th graduating class. We created the EDHEC-Risk Institute then its spin-off Scientific Beta, achieving global reach in finance. In January, we sold Scientific Beta for USD200m. That windfall will be used to foster our commitment to sustainable projects which are the core of our strategic plan. See more Why a top quant wants to be wrong about markets?"Riccardo Rebonato has spent a career trying to make sense of markets. Today, he’s finding they make little sense at all. “It completely baffles me how we can have equity prices that are similar to the prices in December, when the word Covid was unknown,” says Rebonato, a finance professor at Edhec and former chief quant at Pimco. “Everything points to massively lower prices,” he says. Current stock market valuations fly in the face of asset-pricing theory, in which Rebonato is a leading” Copyright Risk.net See more Defining and exploiting value in US Treasury bonds"EDHEC’s Riccardo Rebonato, Jean-Michel Maeso and Lionel Martellini propose a definition of value in Treasury bonds that allows for statistically significant and economically relevant predictions of cross-sectional excess returns.” Copyright ETF Stream See more CPD: Factor investing – an introduction"Motivations to use smart beta and factor strategies: A 2019 survey[15] of European investment professionals, conducted by EDHEC Risk Institute, found the most important motivation behind the adoption of smart beta and factor investing strategies is to improve performance. On a scale from 0 (no motivation) to 5 (strong motivation), respondents gave an average score of 3.76 to ‘Improve performance’. ‘Manage risk’, which is in second position among key motivations (score of 3.25), is also an important element of choice when it comes to smart beta and factor investing strategies (see Figure 4)." Copyright AdviserVoice See more ICMA principles to help sustainable bond push"The fact that issuers set and monitor their own targets on sustainable debt is also controversial."If you leave economic actors to self-regulate you will end up protecting insiders and the status quo," said Gianfranco Gianfrate, the sustainable finance lead expert at the EDHEC risk institute in Paris." Copyright Reuters’ Refinitiv International Financing Review See more Les hedge funds lorgnent la dette des entreprises en faillite ou en grande difficulté"En 2009 , ces fonds avaient gagné plus de 35%% . Sur le long terme , les actifs décotés constituent la deuxième stratégie la plus performante. Depuis 2001 , elle gagne en moyenne 7 ,25 %% chaque année derrière les émergents ( + 7 ,40 %%) , d ' après les indices de ' Edhec Risk Institute.” Copyright Les Echos See more Green Pioneers"Fiscal policy fatigue isn’t just a UK problem. Worldwide, rising deficits undermine plans to cut carbon emissions. While acknowledging the risk, EDHEC-Risk Institute finance professor Riccardo Rebonato is philosophical, arguing that getting Covid-19 under control is a prerequisite for progress towards economic sustainability. “Let’s not forget that all non-Covid-related research (including climate change research) is currently on hold. Therefore, also from the perspective of fighting climate change, the best strategy is to get back on course as quickly as possible.” Copyright Investors Chornicle See more Jobs bonanza in stewardship and sustainable investing teams"Gianfranco Gianfrate, a professor of finance at Edhec Business School, said corporate governance and sustainable work used to be viewed as dull with the roles often filled by those deemed less skilful by bosses. However, asset managers were now recruiting people with specialist skills and knowledge, he said. “There has been a change in the quality of people in the stewardship teams.” Copyright Financial Times See more EDHEC-Risk Introduces A Comprehensive Investment Framework Blending Liability-Driven Investing and Factor Investing"To explain what role factors can play in liability-driven investing is the purpose of a new EDHEC-Risk Institute publication entitled “Factor Investing in Liability­Driven and Goal­Based Investment Solutions”, conducted as part of the “ETF, Indexing and Smart Beta Investment Strategies” research chair supported by Amundi. Specifically, the authors analyse the benefits of a factor investing approach at three stages: 1. The construction of a performance-seeking portfolio that efficiently harvests factor risk premia across and within asset classes; 2. The construction of a liability-hedging portfolio that replicates as closely as possible factor exposures driving changes in the present value of liabilities; 3. See more Fuzzy data stalls ESG alpha hunt"Quants have found that raters’ different ways of refining the raw data they gather adds further to the confusion. Leading providers concur on only about half the companies they rate according to data from State Street Global Advisors. Some score companies by picking out the best and worst performers overall. Others pick out the best and worst by industry. “You can come up with an oil “ company that has a huge carbon footprint but good sustainability ratings,” says Gianfrate. See more How machine learning will reshape the future of investment management"Investment management is justified as an industry only to the extent that it can demonstrate a capacity to add value through the design of dedicated investor-centric investment solutions, as opposed to one-size-fits-all manager-centric investment products. After several decades of relative inertia, the much needed move towards investment solutions has been greatly facilitated by a true industrial revolution taking place in investment management, triggered by profound paradigm changes with the emergence of novel approaches such as factor investing, liability-driven and goal-based investing, as well as sustainable investing. Data science is expected to play an increasing role in these transformations. See more More needs to be done to address the post-retirement challenges"The foundations of the investment knowledge for the Post-Retirement Investment solution as outlined above have regularly been posted on Kiwi Investor Blog. For those wanting more information, see the following links: A key foundation knowledge is Liability Driven Investing (LDI): More on Liability Driven Investing (LDI) for beginners. LDI is used by insurance companies and Defined Contribution Fund to manage their investments to match future cashflows/Income requirements. There needs to be a greater focus on generating Income in retirement during the accumulation phases: What Matters for Retirement is Income not the Value of Accumulated Wealth. Goal-Based Investing (GBI) is the wealth management application of LDI. See more SGX invests 186m euros for 93% stake in index firm Scientific BetaScientific Beta is established by EDHEC-Risk Institute (ERI Asia), an affiliate of EDHEC Business School. It is an independent index provider specialising in smart beta strategies, and boasts of having more than 60 asset owners and asset managers using Scientific Beta’s indices to track or benchmark their smart beta investments.” Copyright Business Times Singapore See more IFAs are ‘decades behind’ portfolio climate riskNice-based Lionel Martellini, director at the EDHEC Risk Institute in France, says these risks pose significant threats to portfolio performance. But ignoring them also risks putting off a younger generation of potential clients who care about the environment. ‘This concern will grow, and retail investors will increasingly focus on climate investing,’ he says. ‘It’s important to anticipate that change. It will come up fast – in fact, we are already seeing the trend among younger investors. Addressing climate-related risk in portfolios is important for every adviser – even ones who don’t care about it personally.” Copyright CityWire See more Ces nouveaux acteurs qui bousculent l'oligopoleLe développement du smart beta (indices intelligents) et de l'ESG offre ainsi de nouvelles opportunités, puisqu'ils nécessitent de créer de nouveaux indices surmesure pour chaque stratégie. Le nombre d'indices boursiers a ainsi explosé, au point où l'on compte depuis quelques années davantage d'indices boursiers que de sociétés cotées en Bourses. Parmi les nouveaux acteurs, des universités se sont lancées, comme le CRSP de l'université de Chicago ou l'EDHEC Risk Institute de l'école de commerce parisienne.” Copyright Les Echos See more Focus intensifies on KPIs for brown companies""There is a convenient industry creating KPIs that is allowing a lot of greenwashing," said Gianfranco Gianfrate, professor of finance and sustainable finance lead expert at EDHEC risk institute in Paris. The Loan Market Association has already published sustainability-linked loan principles, but highly-rated companies "self-arrange" their own loans in the private loan market, and some have been able to set unchallenging targets with relationship banks. One company even described its own KPIs as "laughable" as they included targets around renewable energy use, recycling and promoting online products that were already part of its business and strategy. Weak KPIs help firms to avoid change by simply pledging to meet existing targets. See more The business school for the financial industry"EDHEC Business School has become a key academic institution for the financial industry, a premier academic centre for applied financial research recognised worldwide. Since the creation of the EDHEC-Risk Institute (ERI) in 2001 – a research centre dedicated to asset and risk management – the school has developed academic or industrial partnerships with large and prestigious financial institutions and innovative educational initiatives for individual and institutional investors. ERI has also created two new international entities. EDHEC Infrastructure, supported by Singapore’s monetary authorities, conducts research on the financing and management of infrastructure investments. See more ETF Insight: Consistent ESG data needed for sustainable investing to avoid greenwashing issues"According to Gianfranco Gianfrate, Professor of Finance at EDHEC Business School, there are around 200 providers of ESG data scores. (...) “Because there are so many data providers [with such varying scores],” Gianfrate said at ETF Stream’s ESG Investors Forum event, “investors are able to find one that rates the sustainability of a company even the others do not. It is like having no ESG ratings at all.” Copyright ETF Stream See more Los cursos en línea más populares de 2019 según Class Central"Escuela de Negocios EDHEC Python y Machine Learning para la gestión de activos a través de Coursera” Copyright IBL News .es See more Les hedge funds surfent sur l'envolée mondiale des marchés"Parmi eux, Kynikos le fonds de James Chanos a réussi la prouesse de gagner plus de 20 % sur les 10 premiers mois de l'année alors que Wall Street vole de record en record pénalisant les vendeurs à découvert qui perdent 7,2 % selon l'indice Edhec Risk Institute. Il a parié sur la chute de Grubhub, une entreprise américaine de livraison de repas dont l'action a cédé 36 %.” Copyright Les Echos See more EDHEC-Risk Institute and FirstRand launch research chair"EDHEC-Risk Institute and FirstRand Limited (FirstRand or the group) are partnering for the first time to launch a three-year research chair entitled “Designing and Implementing Welfare-Improving Investment Solutions for Institutions and Individuals” to expand the scientific literature on investor welfare-enhancing methodologies for portfolio construction in a goals-based investing framework. Year 1 will focus on a detailed analysis of the interplay between diversification and insurance, with the aim of determining whether it is possible to achieve an improvement in investor welfare by creating a diversified portfolio of insured assets, as opposed to insuring a portfolio of diversified assets.” Copyright Money Marketing See more PGGM’s van Dam sees inflated expectations of sustainable finance"Speaking at an Edhec climate finance conference in Paris this week, Jaap van Dam said: ”Sometimes it feels that the whole of society is looking at the financial sector to solve the climate change problem.” I think that’s a much overrated thing,” he said. “Climate change is actually produced in the real world, so it’s about capital owners, it’s about capital investments, it’s about consumers, and I think the government has a very large role to play.”” Copyright IPE See more