Press Release

Institutional Investors in ESG are Starting to Demand that Asset Managers Perform More Granular Research

June 28, 2024
Luke Longinotti

Pensions & Investments

ESG Research Analyst, Luke Longinotti, CFA spoke to Pensions & Investments about KAR’s approach to ESG and sustainability.


Luke touched on investment managers helping clients better understand ESG and sustainable investing, how that helps set expectations, and allows clients to have a better idea of what their managers are providing. “There has been improvement in how investors are delineating between things such as integration and impact investing, but better understanding will help better match buyers with sellers and create a market where expectations are better aligned with outcomes,” he added.


Luke also discussed KAR’s use of the Sustainability Accounting Standards Board to identify and assess risks and opportunities. “We decided to rely on SASB because we felt aligned with how the organization emphasizes the financial impact of sustainability issues—something which is central to our ESG process.”


Along with using SASB, KAR still conducts a full due-diligence looking at the company-specific position relative to the given issue.


“Many of our clients share this perspective and appreciate the mosaic that has to be created in making an investment decision, where ESG is only a piece of the whole,” he stated. Luke further shares that KAR is also seeing more requests for further details such as how do we engage, what is a threshold for engaging with management, and how do we measure progress for engagements over time? The team is in the early stages of formalizing our engagement and typically focuses on proactive engagements, such as responding to controversial proxy votes, questioning them about an acquisition target or decision, or discussing allegations of misconduct that have come up in our research.


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