To Divest Or Not To Divest? We Believe That's The Wrong Question

Jul. 21, 2021 3:40 AM ETESG, ESGG, ESNG, ESGN, EFIV, SNPE, IVRA, ESCR, ESGU, LCTU
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Summary

  • For many years, divestment has been seen as the fastest, most effective way to lower a portfolio’s carbon footprint - and many universities and affiliated foundations continue to grapple with the question of whether to divest or not.
  • Materiality is the weighting of ESG characteristics, such as carbon exposure, in proportion to how materially they will impact the financial outcomes of a specific industry.
  • So, why does all of this matter? Because materiality helps investors incorporate relevant, impactful ESG considerations into their portfolios, thereby potentially better enhancing returns.

Investment management. Portfolio diversification.
Olivier Le Moal/iStock via Getty Images

Originally published in partnership with the Association of Governing Boards of Universities and Colleges (AGB).

A number of colleges and universities, as well as their affiliated foundations, are under significant pressure from students, faculty and advocacy

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Russell Investments is a leading global investment solutions firm with $326.9 billion in assets under management (as of 3/31/2021) and $2.8 trillion in assets under advisement (as of 12/31/2020) for clients in 32 countries, The firm provides a wide range of investment capabilities to institutional investors, financial intermediaries, and individual investors around the world. Building on an 85-year legacy of continuous innovation to deliver exceptional value to clients, Russell Investments works every day to improve people’s financial security. Headquartered in Seattle, Washington, Russell Investments has offices in 19 cities around the world, including in New York, London, Tokyo, and Shanghai.  Russell Investments’ ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners, Russell Investments' management and Hamilton Lane Incorporated.Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the “FTSE RUSSELL” brand.

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