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Kleinwort Hambros guides clients into a new era

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Mouhammed Choukeir, chief executive officer of Kleinwort Hambros, explains how the bank will play a leading role in the evolution of responsible banking.

When we decided to embark on a new strategy for our private banking and wealth management business we recognised our responsibility to clients, staff, regulators, suppliers and shareholders and how this should govern the way we behave as an organization.

The vision of Kleinwort Hambros is to be the leading responsible bank for client service and expertise. We have set the bar high in terms of saying we want to be recognized for leadership across all aspects of responsibility, including how we manage our clients, our investments, our business and our staff. We have also created a dedicated responsible bank committee to focus on all areas of responsible banking.

One measure of our success in reaching this goal is client satisfaction. Engaging with clients has been paramount during the pandemic and we have used interactive technology to continue to offer the full private banking experience to existing and prospective clients. This includes hosting regular calls via Zoom and Skype, launching a new podcast series and running virtual investment roundtables.

Employee satisfaction and having a diverse workforce with high staff engagement is another priority. We have rolled out numerous diversity initiatives, our executive committee is gender balanced, and recruiting and promoting from varying backgrounds remains front-of-mind.

In addition, we offer our employees 24 hours of volunteering time per year, which can be used for personal volunteering or to contribute to the range of citizenship programs organized by the bank. These include skills and experience from one-off employability, enterprise and business planning workshops, to ongoing primary tutoring, adult literacy sessions, mentoring and trusteeships.

We are also focused on achieving recognition within the industry as being a leading responsible bank, whether this is through awards or regulatory recognition that we are providing sustainable solutions for our clients and stakeholders. Delivering sustainable profitability that allows us to reinvest and grow the business is also very important.

For clients who have investment portfolios, we will ensure that these investments are in keeping with the criteria of responsibility by excluding certain types of investments – an investment in thermal coal, for example, would not be appropriate.

There is also an inclusivity aspect, where we actively look to include investment Companies that exhibit high responsibility credentials.

When we compare our investment portfolios to others across the industry based on their ESG criteria, our portfolios are higher rated, which gives us confidence that our approach is market leading. In addition, our investment performance across the board has been strong, one of the best in the industry as verified by the peer group we look at.

It is encouraging that the providers of investment products are increasingly changing their product set to reflect increased interest in responsible investing. Many listed companies have committed to improving their responsibility credentials and therefore are becoming more attractive to investors. The next step is to further evolve how we provide information to clients about the Environmental Social and responsible impact of their portfolios, in ways that are easy to understand.

There are three inputs that have further strengthened our conviction that we are proceeding on the right lines. The first is feedback from client surveys and conversations, which shows they are very keen for us to continue this path of accountability.

Then there are the observations of industry bodies and research firms, who confirm that responsible banking is a growing trend that is here to stay. Finally, there is the regulatory angle – responsible banking is increasingly on the agenda of regulators around the world.

A global responsibility

Our parent company, Societe Generale, is committed to the Paris Agreement and we are already a leader in terms of climate change and renewable energy. Societe Generale has recently signaled a new stage in its climate strategy to strengthen its leadership in energy transition with a target to reduce its overall exposure to oil and gas by 10% by 2025.

At Kleinwort Hambros, we have committed to expanding our responsibility credentials through signing up to initiatives such as the Principles for Responsible Investment and the UK Sustainable Investment and Finance Association. We are also signatories to the Women in Business Charter and part of the WealthiHer Network whose aim is to champion the transformation of the financial services industry's approach to female investors, which are further examples of our commitment to being more engaged with important social and industry topics.

My mandate is to transform Kleinwort Hambros over the next five years, and I feel a sense of pride and responsibility to deliver on this. I would also like to thank our staff for their continued commitment and flexibility by helping to contribute to making this happen.

The concept of responsible banking is not new, but I believe there is an opportunity for leadership in that space and Kleinwort Hambros is well positioned for this. In the very near future, I am confident that responsible banking will be a given in terms of how companies should be run and funds should be managed.

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