Difference between revisions of "Sustainable Portfolio Management"
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* the business model of the [[Portfolio Manager]] (trading, buy-and-hold) | * the business model of the [[Portfolio Manager]] (trading, buy-and-hold) | ||
* the business values, objectives and constraints (e.g., financial return, [[Sustainable Development Goals]]) | * the business values, objectives and constraints (e.g., financial return, [[Sustainable Development Goals]]) | ||
| − | |||
== Elements of Sustainable Portfolio Management == | == Elements of Sustainable Portfolio Management == | ||
Some common elements of portfolio management practices are: | Some common elements of portfolio management practices are: | ||
* Organizational Aspects | * Organizational Aspects | ||
| − | * Data Infrastructure | + | * Data Infrastructure |
| + | * Analytics / Measurement Tools and Models | ||
* Policies and Other Management Tools | * Policies and Other Management Tools | ||
| Line 21: | Line 21: | ||
* Defining the scope of activities (including which portfolios, asset classes) and which sustainability dimensions | * Defining the scope of activities (including which portfolios, asset classes) and which sustainability dimensions | ||
| − | === Data Infrastructure | + | === Data Infrastructure === |
* Position / Financial Data | * Position / Financial Data | ||
| − | * Historical Data and Risk Analytics | + | * Environmental Data |
| + | * Historical Data | ||
| + | |||
| + | === Analytics / Measurement Tools and Models === | ||
| + | * Risk Analytics | ||
* Scenario Analysis, [[Stress Testing]] | * Scenario Analysis, [[Stress Testing]] | ||
* Risk-based Measures and Portfolio Valuation | * Risk-based Measures and Portfolio Valuation | ||
| Line 36: | Line 40: | ||
* Capital Allocation | * Capital Allocation | ||
* Portfolio Optimization | * Portfolio Optimization | ||
| − | |||
== Issue and Challenges == | == Issue and Challenges == | ||
| − | * | + | * Sustainable Portfolio Management is an emerging and rapidly evolving field<ref>D. Schoenmaker & W. Schramade, Principles of Sustainable Finance</ref> and suffers from many of the data quality, definitional ambiguities, poorly articulated objectives etc. of much of current sustainable finance |
== See Also == | == See Also == | ||
Revision as of 14:06, 29 May 2022
Contents
Definition
Sustainable Portfolio Management denotes a set of principles, tools, processes and management roles that pursue the management of a portfolio (collection) of financial positions (assets) while at the same time recognizing and integrating some or all of the Sustainable Development Goals. It is an emerging field in the context of Sustainable Finance.
As with more general Portfolio Management, practices and tools for sustainable portfolio management vary depending on:
- the nature of the portfolio and its constintuent instruments (e.g. credit portfolios, securities, derivatives etc.)
- the business model of the Portfolio Manager (trading, buy-and-hold)
- the business values, objectives and constraints (e.g., financial return, Sustainable Development Goals)
Elements of Sustainable Portfolio Management
Some common elements of portfolio management practices are:
- Organizational Aspects
- Data Infrastructure
- Analytics / Measurement Tools and Models
- Policies and Other Management Tools
In more detail:
Organizational Aspects
- Identifying the roles and high level objectives of portfolio managers and the interaction with other stakeholders
- Defining the scope of activities (including which portfolios, asset classes) and which sustainability dimensions
Data Infrastructure
- Position / Financial Data
- Environmental Data
- Historical Data
Analytics / Measurement Tools and Models
- Risk Analytics
- Scenario Analysis, Stress Testing
- Risk-based Measures and Portfolio Valuation
- Model Validation
Policies and other Management Tools
- Portfolio Strategy
- Portfolio Steering Targets
- Portfolio Limits
- Concentration Risk Measurement
- Stress Testing Exercises
- Capital Allocation
- Portfolio Optimization
Issue and Challenges
- Sustainable Portfolio Management is an emerging and rapidly evolving field[1] and suffers from many of the data quality, definitional ambiguities, poorly articulated objectives etc. of much of current sustainable finance
See Also
References
- ↑ D. Schoenmaker & W. Schramade, Principles of Sustainable Finance
