For them, 2017 can be a game-changer for investors, as technological, socio-demographic and energy trends are reshuffling the social order and the investment landscape. Here are the six trends identified by MSCI experts:
- Owning the long game: taking into account how globalisation and digitalisation have reshaped social cohesion and brought populism in the spotlight, this year could be a moment of strategic decision for investors, likely to gear towards the long-term view.
- The shift from regulatory to physical risk: with confusing signals coming from the US administration, investors will likely turn their attention to mitigating exposure to the physical risks from climate change.
- Choosing stewardship in Asian capital markets: as companies in Asia gear up to access financing, there is a real opportunity for investors to influence companies’ behaviour and push for a change of mind-set.
- ESG investing as a precision tool research: the use of ESG factors as a performance indicator keeps growing. MSCI expects institutional investors to apply more targeted strategies to integrate ESG aspects across asset classes and markets.
- Adoption of a new performance language: investors, companies, governments and citizens will work together more and more within the UN Sustainable Development Goals' framework. This year will see the adoption of corporate disclosures targeting these goals going up, as well as institutions enlarging their programmes for impactful investments.
- Green shoots in China and India's sustainable finance: China, India and other emerging countries have seen a surge of innovation in sustainable development projects. In 2017, companies are likely to deepen their understanding of the connection between sustainability and foreign capital and thus adopt domestic and global standards.