Mirae Asset Investment and Pension Center Publishes Issue 4 of 'Investment and Pension' Titled 'ESG Changes the Rules of Long-Term Investment'

[Asia Economy Reporter Minji Lee] Mirae Asset Investment and Pension Center announced on the 5th that it has published the 4th issue of the investment magazine "Investment and Pension," titled "ESG, Changing the Rules of Long-term Investment."

In this issue's cover story, "ESG, Changing the Rules of Long-term Investment," Mirae Asset Investment and Pension Center analyzed what ESG is, why pension investors should pay attention to it, and how to invest accordingly.

According to the Investment and Pension Center's analysis, the reason pension investors should be interested in ESG is that ESG factors affect corporate financial performance in the long term. ESG stands for Environmental, Social, and Corporate Governance, but ESG is not simply a collection of these words. ESG can be defined as "a management philosophy and behavioral principle that places consideration for the environment and humanity as core values in the pursuit of profit." In other words, companies that care about the environment and society tend to increase their profits in the long run.

Improvement in long-term financial performance is highly likely to lead to an increase in long-term investment returns. In 2003, the Asset Management Working Group (AMWG), composed of 12 global asset management firms, conducted research on the relationship between investment methods incorporating ESG perspectives and investment performance, concluding that "investing with consideration of ESG factors positively impacts shareholder value in the long term."

Because ESG affects long-term investment performance, there is strong enthusiasm for ESG investing among institutional investors. The National Pension Service (NPS) resolved to activate responsible investment of the pension fund in November 2019, and major global pension funds and sovereign wealth funds consider ESG factors when investing. Supported by the expansion of ESG investments by institutional investors, global ESG-related investment assets are rapidly increasing. According to the Global Sustainable Investment Alliance (GSIA), the size of global ESG-related investment assets grew by 54.5%, from $22.839 trillion in 2016 to $35.301 trillion in 2020.

Pension investors can invest in ESG through ESG equity funds, ESG equity ETFs, and ESG bond funds. ESG equity funds primarily invest in stocks of companies that have received favorable evaluations from an ESG perspective. ESG equity ETFs are characterized by being listed and traded on the stock market. ESG bond funds refer to funds that invest in bonds considering ESG factors.

In addition to the cover story, this issue includes various investment and pension-related information such as how to utilize intermediary-type ISA, how to respond when exceeding the risk asset investment limit in retirement pensions, and how to choose the right electric vehicle ETF for you.

This content was produced with the assistance of AI translation services.