“Net zero involves as much mitigation possible before you start to do the offsetting. From a systems perspective, there is only so much the land, forestry, agriculture, etc. can absorb and we think it’s about 5 gigatonnes. So we need to shrink global emissions to 5 gigatonnes from the 50 it is today.”

This final panel of Responsible Pathway explored the hot topic of climate change with four industry experts -Alex Monk, Portfolio manager at Schroders, Charlie Miller, Climate strategist at Legal & General Investment Management, Dan Grandage, Head of sustainable investing at abrdn and Lorna Logan, Portfolio manager at Stewart Investors. In this lively session they debated:

• The opportunities and challenges presented by climate change.
• Engagement versus divestment in enabling a just transition.
• The importance of carbon mitigation in achieving net zero by 2050.
• How data can be used to measure and evidence change.

Find out more: https://www.squaremileresearch.com/Insights-Resources/Articles/ArticleID/255/Climate-change-carbon-mitigation-and-a-just-transition

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Rates of inflation rose further in the second quarter and continued to take hold in a broadening range of goods and services. It was another difficult quarter for investors in bond markets as this accelerating inflation caused bond yields to rise again and prices to fall further. This story is not too dissimilar to global stock market indices, which pincered between bond yields and mounting fears of recessions, fell sharply in the second quarter.

It was another disappointing quarter for investors as we continue to face one of the toughest market backdrops seen in decades. In this month’s episode of Talking Research, we discussing how the fund managers in Square Mile’s Academy of Funds are responding to this challenging environment, exploring:

• How fixed income managers are responding to rising inflation.
• Whether the market has fully priced the risk of recession
• If the market correction has increase the opportunity set for equity managers.
• The short-term challenges for RI funds.

Square Mile's Strategic Relationships Director, Jock Glover, speaks with Ajay Vaid, Investment Research Analyst, Eduardo Sanchez, Head of Fixed Income and Absolute Return Research and Tom Poulter, Head of Quantitative Research in this latest episode. 

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“ESG is doing the thing right. Impact is doing the right thing.”

Impact investing is very much about having clear intent to make a wider positive social and/or environmental impact, and being able to measure and evidence that impact. Whilst still a fairly nascent field, impact is graining traction, however what do investors need to consider when investing in this way.

Square Mile’s Steve Kenny spoke with three industry experts at Responsible Pathway to dig a little deeper into impact investing. Drawing on the expertise of Caroline Cantor, Investment director at Federated Hermes, Mohsin Ahmad, Fund Manager at Regnan and Simon Bond, Executive director, responsible investment portfolios at Columbia Threadneedle Investments, they discussed:

• How impact can be differentiated from ESG.
• Looking beyond the cycle to the long-term opportunities.
• Identifying the impact of a security, and ensure it maintains integrity.
• How investors can enable a just transition, from both a societal and environmental perspective.

For more information: https://www.squaremileresearch.com/Insights-Resources/Articles/ArticleID/254/Impact-Investing-in-mega-trends

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“When we talk about environmental challenges, we are talking about climate change risk and natural capital restoration and biodiversity. Biodiversity is incredibly important, you can’t solve for climate change without solving for natural capital restoration and biodiversity.“

50% of global GDP depends on biodiversity, however nature’s resources are continually used more quickly than can be replenished. While climate change has captured public attention and risen up the political and corporate agenda, biodiversity has lagged behind. Though the upcoming COP15 conference aims to elevate levels of protection for biodiversity, are we doing enough?

At Responsible Pathway Live, we explored society’s relationship with the environment and what this means from an investment perspective. Listen to the full panel moderated by Square Mile's Senior Investment Consultant, Jake Moeller and three industry experts:

• Craig Cameron, Portfolio manager and research analyst at Franklin Templeton
• Rhys Petheram, Head of environmental solutions at Jupiter Asset Management
• Samuel Mary, Senior vice-president, PIMCO

For more information: https://www.squaremileresearch.com/Insights-Resources/Articles/ArticleID/253/Does-economic-security-depend-on-nature

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Thematic investing is an approach which focuses on the long-term driver and trends, rather than specific sectors or companies. From a responsible investment perspective, this really means investing in companies whose goods and services are enabling a more sustainable and inclusive world. As interest and demand for responsible thematics has grown over recent years, we explore how these portfolios differ, what drives these decisions and what opportunities this style of investing offers.

At our recent Responsible Pathway event, we heard from three industry experts on what responsible thematics means and its role in a diversified portfolio, how they determine a theme and ensure securities are aligned and the role of the UN SDGs in this approach and tackling greenwashing. Hear from:

• Katherine Magee Executive director at JP Morgan Asset Management
• Markus Peters, Senior investment strategist—fixed income at AllianceBernstein, 
• Simon Gottelier Senior portfolio manager at Natixis Investment Managers

Find out more: https://www.squaremileresearch.com/Insights-Resources/Articles/ArticleID/251/The-role-of-thematics-in-a-responsible-portfolio

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“This is about embedding the interest of society alongside the interest of investors. Companies that abuse the environment, treat staff poorly, damage the fabric of society, will, in a timeframe, be challenged by the regulators and deserted by customers. Therefore, considerations of these material factors must be part of any credible long-term investment research process.”

Despite the challenges responsible investment funds have faced in the half of 2022, interest and demand has not waned. In this panel from Responsible Pathway Live, we explored what responsible investment looks like in practice, how to identify the right securities, the role of metrics in understanding sustainability, engagement in sovereign bonds and more. Hear from our three experts in the recording below.

• Brunno Maradei, Global head of responsible investment at Aegon Asset Management
• Ella Hoxha, Senior investment manager at Pictet Asset Management
• Marianne Harper Gow, ESG specialist at Baillie Gifford

For more information: https://www.squaremileresearch.com/Insights-Resources/Articles/ArticleID/252/What-does-responsible-investment-mean-in-practice

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Fixed income has traditionally been seen as a safe haven asset, acting as a diversifier to protect returns when markets sell off. That, however, has most certainly not been the case over recent months, whereby we have experienced one of the toughest periods on record for the asset class as central banks attempt to deal with the elevated levels of inflation.

In this month’s episode, Head of Fixed Income and Absolute Return Research, Eduardo Sanchez, speaks with two experts in fixed income – John Pattullo, Head of Strategic Fixed Income and Portfolio Manager at Janus Henderson and Stuart Edwards, Fund Manager at Invesco. In this 25-minute episode, they discuss:

• The role of fixed income in the current market environment, and whether it can act as a safe haven once more.
• If central banks can control inflation, or whether it’s too late and the potential risk of recession.
• How they are positioning portfolios amidst this backdrop and the opportunities for the asset class moving forward.

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The global backdrop over the last few weeks has been almost the been the perfect storm for markets, with rising interest rates, weak supply chains, rising energy prices and, of course, the dreadful situation in the Ukraine. Combine that with the savage rotation within styles and we may be witnessing one of the toughest market backdrops in a long time over the first quarter of 2022.

Drawing on the expertise of Square Mile's research team, in this episode of the Talking Research podcast, we will be discussing this current market environment, exploring:

• The impact of rising inflation
• Whether we should expect a recession imminently
• The improved durability of dividends in global equities

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How concerned should investors be about the current conflict between Russia and Ukraine? Do we need to worry about government debt? Have central bankers contributed to inflation? What does this mean for portfolio allocations? 

Mark Harries, CIO at Square Mile, is joined by two market strategists to discuss the challenges facing investors in the current market environment – Hugh Gimber, Global Market Strategist at JP Morgan Asset Management and Simona Gambarini, Executive Director, Senior Market Strategist at Goldman Sachs Asset Management.

This podcast was recorded on 27th January 2022.

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In the final quarter of 2021, we saw US equities dominate markets, value continue to outperform and more muted portfolio activity from some of the fund managers we speak with, whilst inflation remained a hot topic and concerns around the omicron variant persisted. In this episode, Square Mile's research team share insight on what they heard from fund managers over the last quarter of the year, highlighting the key narratives driving portfolio positioning and what investors may need to consider for 2022.

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