ESG and multi-asset investing
Hello advisers,
How has the way you consider ESG in your multi-asset investing approach changed and how do you communicate or manage the expectations of clients?
Thanks
Ima
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"The majority of the families we look after want the investment that is going to give them the best return to help them achieve their goals. Very few of those we look after have a specific requirement to invest in ESG."
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I used to run investor relations for an international FinTech in Prime Standard on the Frankfurt Stock Exchange. These days, I work with start-up and scale-up entrepreneurs, especially on investor pitching. Back in the day, I recall overhearing an investor saying to a fund manager, "Just give me anything green, I don't care what it is, but I need to fill my quota." Today, I see investors going deep into a niche and wanting to add ESG clauses to term sheets - that is quite a shift!
But. I feel that people require sustainable investment portfolios for the perception of doing good, but returns are still king. ESG, in theory, gives tools to communicate positive proof points. In practice, however, companies and us as individuals still have much to learn, allowing ESG in the meanwhile to be misused to communicate a false sense of security and good doing. We will need to go through an era of greenwashing to educate the market on what really matters and how things come together.
But. I feel that people require sustainable investment portfolios for the perception of doing good, but returns are still king. ESG, in theory, gives tools to communicate positive proof points. In practice, however, companies and us as individuals still have much to learn, allowing ESG in the meanwhile to be misused to communicate a false sense of security and good doing. We will need to go through an era of greenwashing to educate the market on what really matters and how things come together.