NEW YORK--(BUSINESS WIRE)--Rockefeller Asset Management (RAM), the asset management arm of Rockefeller Capital Management, today published its 2022 Sustainable Investing Annual Report, outlining progress in advancing partnerships and investment strategies across RAM’s platform, as well as key trends for investors to consider in the years ahead, in a market featuring geopolitical turbulence and a rise in anti-ESG sentiment.
After labeling 2019 “The Inflection Point” and both 2020 and 2021 “The Breakout Years” for sustainable investing, RAM has nicknamed 2022 “The Blip.” It was a turbulent year of equity and bond market selloffs driven by the conflict between Russian and Ukraine, rising inflation, central bank tightening, supply chain challenges, and Covid lockdowns in China compounded by negative ESG sentiment, increased regulatory scrutiny, and mixed returns.
“Despite strong headwinds, sustainable fund flows dramatically outpaced their conventional peers with approximately $150 billion of net inflows in 2022 compared to $300 billion of net outflows for conventional funds, according to Morningstar,” said Casey Clark, President and Chief Investment Officer of RAM.
Clark said the data was an “encouraging signal,” reinforcing RAM’s opinion of 2022 as just a “blip” in a “multi-decade, secular trend driven by increased evidence of risk and return benefits, an emerging generation of investors’ preference for sustainability, and regulation that provides clarity and minimizes greenwashing.”
The report describes five trends for investors to watch:
ESG Improvers value strategies will proliferate. ESG value strategies emphasizing improvers will proliferate as allocators seek to balance growth exposure from ESG leaders and thematic approaches, while hoping to capture the risk and return benefits of ESG investing.
Thematic strategies focused on ocean health will rise in prominence. The ocean is one of the most unifying issues that resonates throughout the world. As linkages between risk and return, waste, natural resources, climate ambitions and circularity become more apparent, demand for strategies to improve ocean health will grow materially.
Green Capex growth will support companies delivering climate mitigation and adaption solutions. Governments and companies will continue to invest in solutions to help meet decarbonization and infrastructure goals. This coupled with passage of the Inflation Reduction Act in August 2022, providing $391 billion in federal support for climate and energy initiatives over 10 years, and Europe’s plans for increased spending should further support Green Capex growth.
Increasing demand for ESG long-short equity strategies. RAM sees firsthand the need for long-short strategies that seek downside protection, low correlations with global markets, and Article 8 compliance. The firm intends to address this market need in 2023.
The drawbacks of divesting will receive increased media attention. Divestment can drive change and awareness but may also bring unintended adverse consequences for society and investors. Exclusionary screens need to be balanced with risk and return objectives.
View the full report here.
About Rockefeller Capital Management:
Rockefeller Capital Management was established in 2018 as a leading independent financial advisory services firm. Originally founded in 1882 as the family office of John D. Rockefeller, the Firm has evolved to offer strategic advice to ultra-high-net-worth and high-net-worth individuals and families, institutions, and corporations from 40 locations across the United States. Early in 2022, the Firm opened an office in London. As of December 31, 2022, the Firm was responsible for approximately $98 billion in client assets across its three business segments, the Rockefeller Global Family Office, Rockefeller Asset Management and Rockefeller Strategic Advisory.
About Rockefeller Asset Management (RAM):
Rockefeller Asset Management, a division of Rockefeller Capital Management, offers active equity and fixed income strategies across fundamental, systematic, and thematic approaches that seek outperformance over multiple market cycles, driven by a disciplined investment process and a highly collaborative team culture. With over 30 years of experience in global investing and ESG-integrated research, RAM professionals bring a distinctive worldview to fundamental research combining traditional and non-traditional analysis to generate unique insights and outcomes. As of December 31, 2022, Rockefeller Asset Management has $10.4 billion assets under management.
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