Related: How you can save the world by investing in ESG funds
Investment flows to environmental, social and governance (ESG) funds fell to $75 billion in the first quarter of this year amid a sharp decline in global risk appetite, rising inflationary fears and higher borrowing costs, according to Institute of International Finance research.
This was the lowest level compared with the previous seven consecutive quarters.
Inflows to ESG funds in March were $15bn, their weakest since March 2020, the IIF said in a note on Thursday.
“The retrenchment in flows was mainly in equity funds as increased volatility in tech shares reduced investor appetite for ESG funds that are heavily invested in tech,” said Emre Tiftik, director of sustainability research at IIF.
The retrenchment in flows was mainly in equity funds as increased volatility in tech shares reduced investor appetite for ESG funds that are heavily invested in tech
Emre Tiftik,
director of sustainability research at IIF
“Higher oil prices were also a factor as investors channelled funds into [non-ESG] energy stocks. Overall, ESG-labelled equity funds attracted some $41bn of net cash flows in Q1, with monthly flows in March 2022 dropping to their lowest level since March 2020, when the Covid-19 shock triggered large outflows from ESG funds.”
In the year to November 30, 2021, a record $649bn was poured into ESG-focused funds worldwide, up from the $542bn in 2020 and $285bn in 2019, Refinitiv Lipper Research found.
ESG funds now account for 10 per cent of fund assets worldwide.
A survey conducted during Abu Dhabi Sustainability Week in January by Masdar and Harvard Business Review to understand how businesses are enacting ESG strategies, found that 83 per cent of respondents indicated their organisations will increase investments in ESG initiatives over the next 12 months.
However, when questioned about the status of their ESG activities, 27 per cent said they had no formal strategy in place, with a further 10 per cent admitting they were not working on improving their ESG activities at this stage.
The most desired outcome from investing in ESG is to enhance brand reputation, according to 61 per cent of respondents, although only 55 per cent believe they have done so to date.
Flows to ESG fixed-income funds also declined sharply to $14bn in the first quarter of this year, compared with $27bn in the preceding quarter, the IIF research showed.
While rising interest rates hit investor demand for all types of bonds in the first quarter, investment grade ESG bonds outperformed their conventional peers, the IIF said.
However, high-yield ESG bonds underperformed compared with their conventional counterparts, which were buoyed by energy sector bonds, particularly in the first two months of the year.
“Looking ahead, [the] ripple effects of the Russia-Ukraine war will have profound consequences for ESG fund markets,” Mr Tiftik said.
Total ESG-labelled debt issuance amounted to $285bn in the three months to March 31, about 30 per cent lower than in the fourth quarter of last year, the IIF said.
“This slowdown came against the backdrop of increased market volatility — driven by tightening financial conditions as the Fed signals a more aggressive fight to curb inflation, and by the Russia-Ukraine war,” Mr Tiftik said.
“In some instances, the recovery in corporate earnings and the moderation in sovereign borrowing needs have been important factors weighing on issuance volumes.”
The decline in ESG debt issuance in the first quarter was largely associated with sustainability-linked loans and green bonds, with volumes contracting by more than half and by a fifth, respectively, the IIF said.
The growing focus on energy security will hasten efforts to scale up climate finance, spurring the development of clean energy funds, the research showed.
“Investor demand will remain underpinned by the continued acceleration in corporate net-zero pledges,” it said.
With a growing number of financial institutions and non-financial corporates committing to carbon emission reduction, further expansion of ESG fund markets should support international efforts to establish global disclosure standards, the Washington-based agency said.
Meanwhile, total issuance in the voluntary carbon offset market also declined sharply in the first quarter of 2022, with the largest volumes coming from China, the Democratic Republic of the Congo, India, the US and Turkey, the research revealed.
How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
The line up
Friday: Giggs, Sho Madjozi and Masego
Saturday: Nas, Lion Bbae, Roxanne Shante and DaniLeigh
Sole DXB runs from December 6 to 8 at Dubai Design District. Weekend pass is Dh295 while a one day pass is Dh195. Tickets are available from www.soledxb.com
Killing of Qassem Suleimani
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UK's plans to cut net migration
Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.
Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.
But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.
Language requirements will be increased for all immigration routes to ensure a higher level of English.
Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.
The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Boston%20Strangler
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
Top%2010%20most%20competitive%20economies
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ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
The specs: 2019 Chevrolet Bolt EV
Price, base: Dh138,000 (estimate)
Engine: 60kWh battery
Transmission: Single-speed Electronic Precision Shift
Power: 204hp
Torque: 360Nm
Range: 520km (claimed)
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Killing of Qassem Suleimani
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000