Traditional alpha opportunities tend to be found in underappreciated areas of the market where an expected improvement in fundamentals will lead to a rerating of the stock. The same can be said for ESG investing: companies that embrace and improve their ESG profile will be rewarded by the market.
As ESG investing is increasingly relevant, it will be key for investors to be ahead of the curve. Indeed, being positioned in companies where ESG profiles are improving gives the opportunity to capture the ESG premium not yet fully priced in. Anticipating improving ESG dynamics and then reaping the potential rewards is what Amundi offers through its ESG Improvers philosophy. This approach seeks to deliver alpha to clients by investing in companies that have already embraced, or have committed to improve their ESG footprint.
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