In this Scientific Portfolio issue of the EDHEC Research for Institutional Money Management supplement, we present insightful and innovative research to provide institutional investors with an academic perspective on the most relevant issues in the industry today.

This issue has a strong focus on the ESG issues facing today’s investors. Our lead article looks at the potential for digitalized self-indexing to help asset owners account for ESG and climate objectives, among other fiduciary demands. We also give guidance on how portfolio managers can set greenhouse gas emissions reduction targets and avoid “greenwashing” within their portfolios. Finally, we contribute to the European debate on the consistency of equity funds reported as sustainable.

Our other research articles take a look at how long-term conditional simulations can be an important ingredient of an equity investment process and also to assist investors subject to a strict risk budget, we examine the benefits of a factor-based diversification of active risk to stabilize the tracking error relative to a cap-weighted benchmark.