The Covid-19 crisis has highlighted a need for greater awareness of social considerations in investment decision-making. In order to improve understanding of investors’ approach to social considerations, BNPP AM revealed it sponsored a recent ESG study conducted by Greenwich Associates.
The study showed that 81% of respondents already take ESG considerations into account in all or part of their portfolios, with a further 16% planning to do so. The leading reasons were to positively impact society or the environment (80%), reduce risk (58%) and meet stakeholder needs (47%).
The importance of ESG factors
BNPP AM’s market study showed the extent of changing perceptions of the importance of social considerations, with a substantial increase expected.
Overall, almost a quarter of respondents (23%) said that ESG has become ‘more of a focus/more important’ as a result of the COVID-19 crisis. French respondents led the way, with 42% thinking that ESG has become more important; whereas the proportion in Germany was notably low at just 3%.
The importance of all three ESG factors has increased since the crisis began, most notably for social considerations, which 70% of respondents expect to become extremely or very important. The importance of social criteria rose 20 percentage points from before the crisis, closing the gap on Environmental (up 11% to 74%) and Governance (up 4% to 76%) factors.
Environmental and governance factors remain the most important ESG elements of investment approaches, although the increasing focus on social issues shows a major paradigm shift, with significant variation by region.
“The Covid-19 crisis has clearly prompted a shift in investor perception of social factors, which are now widely seen as having a critical and positive impact on long-term value creation and risk mitigation. It has also highlighted the interconnection between the way in which companies approach social issues such as treatment of employees or addressing inequalities in their long-term sustainability strategy. At BNPP AM, we engage with the companies in which we invest with regard to social issues and all aspects of ESG. We encourage companies to evolve and improve their social behaviour, thereby reducing risk and enhancing the sustainable returns that we can deliver to our clients.“ Frédéric Janbon, CEO of BNPP AM, stated.
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Social considerations’ impact on investment performance and risk management
The study also showed a strong view that social considerations have a positive impact: 79% of respondents expect social issues to have a positive long-term impact on both investment performance and risk management. The short-term impact on investment performance appears less significant.
Intermediaries’ perceptions of the positive impact of social considerations is even greater than that of investors: 88% of respondents believe the ‘S’ criteria will have a greater impact on long-term performance versus 76% pre-crisis, and similarly 94% of respondents believe it will lead to better risk management compared to 74% per-crisis.
Respondents’ perspectives of social considerations are subject to multiple influences, primarily global events (38%), news & media (33%) and regulators and internal stakeholders (both 32%). They are less influenced by consultants, who rank low on the list.
Further analysis showed the relative importance of underlying social issues to investment processes. The most important elements were labour standards (38%), excluding harmful investments (31%), human capital management (23%) and gender equality (22%), with community involvement (11%) considered less important.
Barriers to investing
Although 37% of respondents saw ‘no barriers’ to investing with consideration to social factors, two clear barriers emerged from the study: “lack of established/standard metrics” (42%) and “lack of clarity over what socially responsible investment includes” (31%).
This is consistent with another key finding – that a majority of respondents plan to significantly increase the use of social metrics. Almost half the respondents (47%) already use exclusionary metrics, with a further 26% planning to do so, while 33% already use labour standards metrics, with the same percentage expecting to incorporate them.
According to the survey findings, a wide range of market players plan to enhance their focus on social considerations in their ESG approach, a trend which reflects one of the three themes of BNPP AM’s Global Sustainability Strategy, that of equality and inclusive growth.
Bitcoin to Surpass $20,000 ATH By Early 2021 According to Raul Pal
Former hedge fund manager and CEO of Real Vision, Raoul Pal, believes that the real impact of the COVID-19 pandemic is about to reach the financial markets. By outlining several upcoming cornerstones among traditional financial assets, he highlighted Bitcoin as the “life raft” in this situation.
Raoul Pal: Everything Has Changed
In a recent Twitter thread, the Wall Street veteran outlined the rapidly growing COVID-19 cases worldwide. The total number of infected has neared 45 million, while the death toll is almost 1,2 million.
Pal predicted that these rising numbers in Europe, the US, and Canada are about to “exert economic pressures and extinguish the Hope phase of reflation dreams.” He believes that the upcoming consequences will harm the economy even more than the early 2020 developments. A real economic recovery “will take more than a post-election stimulus in January.”
He continued by looking at several markets that have started to feel the adverse consequences and have fallen to long-term support levels. Those included the oil price, Spain’s benchmark stock market index – the IBEX 35, the EU Banks Index, the euro, the British pound, the US dollar, and more.
As such, he broached a few possible solutions – “you can buy bonds and dollars, or you can take the life raft – Bitcoin.”
“Or, to dampen the volatility of a risk-off event (we can and will see sharp BTC corrections), you can have all three for a near-perfect portfolio for this phase.” – Pal concluded.
Bitcoin Will Eat The World And Price Predictions From Pal
Pal further highlighted his positive views on Bitcoin by saying the cryptocurrency “will eat the world.” He attributed it to its performance, which is so dominant and so “all-encompassing” that it will “suck in every single asset narrative dry and spit it out.”
“Never before in my career have I seen a trade so dominant that holding any other assets makes almost no sense.”
As far as price predictions go, Pal said that $14,000 is the only resistance left in Bitcoin’s way to the all-time high at $20,000. He expects that BTC should overcome the December 2017 high by “early next year at the latest.”
Additionally, CryptoPotato recently reported an even more optimistic and long-term forecast. By using a regression on the logarithmic chart since inception, Pal brought up a model that sees Bitcoin reaching $1 million by 2025.
Featured Image Courtesy of BusinessInsider
Coinbase Launches A Crypto Debit Card With 1% Reward on Bitcoin Spendings
- The largest US-based cryptocurrency exchange Coinbase announced today the launch of a Visa debit card, allowing customers to spend digital assets for everyday purchases.
- According to the official statement, the Coinbase Card will provide clients the opportunity to earn up to 4% back in cryptocurrency rewards.
- It will be available in nearly 30 countries, including the US, the UK, and across Europe. It will be connected to customers’ Coinbase accounts, and they can spend the funds without having to move funds to their bank accounts.
- The designated cryptocurrency asset spent by users will be automatically converted to US dollars prior to completing the purchase or the ATM withdrawal.
- The rewards will be available for US-based customers only initially and will depend on the cryptocurrency used. For instance, customers can get 1% back if they spend bitcoins and 4% back if they choose Stellar Lumens (XLM).
- The Coinbase app will serve as a fund manager. All spendings, reward details, and preferences will be manageable through the app.
- US customers can start applying to receive the card through the exchange’s app or the website. The first approved clients will be announced “this winter,” and they can start spending with a virtual card. The physical one will be delivered within two weeks.
Bitcoin-Friendly Avanti Receives License to be The Second Crypto Bank in The US
Now the United States can boast a new crypto bank: Welcome Avanti.
Avanti Financial Group, a firm founded by the former managing director at Morgan Stanley, Caitlin Long, announced that it had been granted a license to offer banking services by the Wyoming State Banking Board.
Avanti is The Second Crypto-bank Operating in the United States
With this decision, Avanti becomes the second crypto company to receive a banking license after the crypto exchange Kraken was also authorized by the Wyoming State Banking Board.
This license allows Avanti to offer financial services in the same way that a traditional bank would, only that these are in addition to the crypto services already provided by the platform.
According to Avanti, the application in the state of Wyoming was key to meeting its expectations —just like Kraken did— as it is the only state in the country that has a regulator with a bank supervisory and regulatory program for digital assets mature enough to ensure the operations of a banking platform that offers risk-free custody services.
Currently the only type of U.S. financial institution that can provide final and simultaneous settlement of trades between digital assets and the U.S. dollar-because it is the only type currently approved to handle both within the same legal entity-is a Wyoming special purpose depository institution like Avanti.
Blockchain and Banking Working Together
Avanti said in a tweet that the first crypto product the company will launch will be a stablecoin pegged to the dollar and backed by physical deposits made to its bank accounts. The token will be called Avit and will be available for its customers in the first quarter of 2021.
AVANTI IS OFFICIALLY A BANK! Our charter & business plan were approved 8-0 today, incl. #Avit (a tokenized US dollar, which we announced we’ll issue initially on #Liquid (#Bitcoin sidechain) & #Ethereum. Open for commercial customers early Q1. More here:https://t.co/CgNazN08zV
— Avanti Bank & Trust (@AvantiBT) October 28, 2020
Avanti revealed that Avit tokens will run on Ethereum – a critical blockchain for those seeking to take advantage of programmable smart contracts – and Liquid – a Bitcoin sidechain developed by Blockstream for those seeking to benefit from inter-exchange transfers for arbitrage operations.
Avanti had previously confirmed its collaboration with Blockstream to develop this token, explaining that it would not be like a normal crypto-currency and that it would be “just bank money that happens to be issued on a blockchain.” So it may look more like JPM Coin than the famous USDT.
Caitlin Long promised that Avanti “will provide products and services that do not exist in the market today. They did not refer to what they had in mind, so we can only hope.
There has been a lot of activity around cryptocurrency and financial services with blockchain technology in the United States. After MicroStrategy announced a major investment in Bitcoin, Square revealed a $50 million investment in BTC. Also, PayPal started providing support for cryptocurrencies and JP Morgan started using its own cryptocurrency commercially days after it talked about Bitcoin’s potential to triple its price.
Most of these announcements helped boosting BTC’s price. Will this have a bullish effect too?
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