Environmental, Social and Governance investing—or ESG—is a type of sustainable investing that entails researching and factoring in environmental, social and governance issues, along with traditional financials, when making investment decisions.
Focused on making a positive impact on society while earning a profit, ESG investing is a newer area of finance that boasts stunning growth. Corporations are announcing large investments in ESG and betting on sustainability—a development that Bryant finance graduates are prepared for.
Bryant leading the way
In 2017, Bryant was one of the first schools in the country to integrate ESG investing into their finance curriculum. Bryant's student-managed Archway Investment Fund (AIF) is a hands-on course of study where students manage a $2M+ equity portfolio while integrating environmental, social and governance metrics into the decision-making process. Since early 2017, every student who participates in Bryant’s student-managed Archway Investment Fund develops ESG investing skills and a sustainability mindset.
Bryant’s ESG investing model stands out as one of the first student-managed funds in the nation with ESG integration, says Asli Ascioglu, Ph.D., Department Chair and Professor of Finance. Ascioglu co-teaches AIF courses with Kevin Maloney, Ph.D., Senior Lecturer of Finance and Executive in Residence. “Our ESG program is sophisticated—we don’t exclude industries such as oil or so-called ‘sin stocks’ such as gambling. Instead, the students look at every company through the lens of ESG.”
“Understanding ESG factors is becoming an essential skill.”
For example, every stock pitch that the students make includes an analysis of the company’s ESG issues. “Since we began discussing ESG in the Archway Investment Fund, our students have never proposed a company with a worst-in-class ESG rating for the portfolio,” says Ascioglu.
The sophistication of ESG integration in the Fund was a result of Bryant’s dedication to offering as close of a real-world investing experience as possible in order to create prepared graduates, says Ascioglu. “In Bryant’s C.V. Starr Financial Markets Center, we have many industry-level resources, from Bloomberg to Factset to ESG reports from MCSI, for the students to use in decision-making for the portfolio. And, we combine faculty expertise with the tools, which means we are able to catch trends early and help our students learn from them,” explains Ascioglu, who says sustainable investing has been trending up significantly in the finance industry since around 2014, pointing to a data set published in the Annual Archway Report.
The sophistication of Bryant’s ESG investing model is what garnered Bryant an invitation to a top sustainable investing educational organization known as the SIILK (Sustainable Impact Investing Learning and Knowledge) Network in 2017. As a member of the organization, Bryant serves as a leading resource alongside other institutions including Ivy League schools for finance academics across the country. Most recently SIILK asked Bryant as well as New York University, Yale University, Stanford University and others to create a toolkit for institutions on how to create a student-managed sustainable investing fund as well as a white paper report on the state of educating the next generation of sustainable investing leaders.
In 2020, the SIILK Network hand-picked Bryant University alongside Yale University, UC-Berkeley and Arizona State University to pilot and participate in a new academic challenge called The Student Corporate Engagement Competition. For this challenge, a team of Bryant Archway students wrote a shareholder engagement strategy and successfully demonstrated how climate change poses material risks to a company’s bottom line. Bryant students have also given presentations on the Archway Fund and have received scholarships to attend SRI conferences with leading finance academics.
“The SIILK Network provides unique opportunities for our finance students, and it is a great resource for Bryant,” says Ascioglu of Bryant’s participation in the organization.
ESG is about “how issues like climate change affect business. Climate change affects a company’s performance very strongly; it affects their profit and loss.”
In addition to the Archway Fund and SIILK Network activities, the personalized attention that finance faculty provide to students helps take their learning further, even after graduation. Recently Juan Gonzalez ’20, a former Archway student, published a scholarly research paper on ESG investing with Professor Ascioglu and Leila Zbib, Ph.D., Assistant Professor of Finance, as co-authors. Gonzalez is currently an equity analyst at Bloomberg in London. “It’s significant for a recent undergraduate to already have published research on this trending topic,” says Ascioglu, adding that such experiences serve any resume well.
Bryant finance grads are in demand
Archway Fund alums continue to find jobs in organizations such as Merrill Lynch, Goldman Sachs, Bank of America and others. Some even land in ESG-centered positions and at leading ESG firms such as Pathstone. And Professor Ascioglu doesn’t see the demand slowing for ESG skills anytime soon.
“ESG is not just values-based investing, or ‘I care about climate change.’ It’s about how issues like climate change, for example, affect business. Climate change affects a company’s performance very strongly; it affects their profit and loss,” says Ascioglu.
“Understanding ESG factors is becoming an essential skill, so we believe graduates should know ESG factors analysis, which is why our students know how to make—and are making—actual investments using ESG factors. Some can even talk in-depth about ESG. We’re very proud of our students’ and graduates’ abilities.”