AB: Responsible Investing: Four Themes To Follow in 2024

NORTHAMPTON, MA / ACCESSWIRE / April 12, 2024 / Erin Bigley, CFA| Chief Responsibility Officer

From biodiversity and blended finance to a just transition and the cost of drugs, we preview the key ESG issues we're targeting through research.

It used to seem simple. The early days of responsible investing were mainly characterized by avoidance of so-called sin stocks, such as tobacco. Since then, responsible investing has evolved into a much more sophisticated and robust understanding of the environmental, social and governance (ESG) issues affecting investment risks and opportunities. Every year seems to bring new insights, as well as new challenges for investors.

At AllianceBernstein, our research agenda aims to bring rigor and clarity to responsible investing. Below are four themes we're covering closely in 2024 through our research and partnerships. We think investors should pay close attention too.

1. The interconnectedness of all things.

Responsible investing research must take into account the complexities of relationships, not only within and across intuitively related areas of study-such as the effects of climate change on biodiversity and vice versa-but also between what have historically been viewed as the silos of E, S and G factors.

For instance, climate change is one of the most urgent challenges of our time-one that's often seen as strictly an environmental concern. But it's also a human rights issue. Neglecting to account for climate-related modern slavery threats may present material financial risks to investors.

To that end, we've recently published research in partnership with Walk Free, an international human rights group, on the intersection of climate change with modern slavery. Our work explores how physical climate risks such as typhoons and droughts make populations more vulnerable to forced migration, human trafficking, forced labor and debt bondage. It also details the tools we've developed to help investors assess, disclose and manage climate-related modern slavery risks.

Another area of focus for our ESG research-and another highly complex system that intersects with climate change and involves every kind of ecosystem service-is biodiversity. Investors are becoming increasingly aware of the importance of biodiversity and the urgency of preserving our planet's natural capital-the stock of natural resources that underpin our economy and society.