The Covid-19 pandemic has highlighted not only the importance of resilient and sustainable business models but also the fact that profitability – and therefore investor returns – is dependent on how companies treat their employees and contribute to society. It has led investors to increase their allocations to environmental, social and governance (ESG)-focused funds and sustainable investments this year. In the second quarter, for example, European sustainable funds attracted record inflows of €54.6 billion according to data from Morningstar.
Any residual idea that responsible or sustainable investing requires a trade-off with returns has now been put to bed. However, there still remains a lack of knowledge in the financial and adviser community about those financial and non-financial returns.
PANEL IV: THE REALITIES OF SOCIALLY RESPONSIBLE INVESTMENT 2020
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PANEL IV AGENDA
OUR EXPERTS DISCUSS:
- Clients have become increasingly interested in SRI. As a result client demands have become more sophisticated. As clients demand a more personalised sustainable investment experience, what tools and products do relationship managers need to be able to offer? How well are they meeting client needs?
- One criticism often aimed at SRI investment practices is the shortage of innovative, high-performance assets, is this an issue you have had to face? How have you addressed it?
- New amendments to MIFID II, expected to be introduced in 2021, will mean advisers, as part of their KYC, will need to take an active role in discussing ESG preferences with clients. How will greater regulatory scrutiny affect the SRI microcosm? Are advisers ready to have a more in-depth ESG conversation?
- What are the common methodologies of sustainability rating used by private banks and their clients? Is there a discrepancy between the data available and the data the clients would like to see? How do different ratings perform in terms of consistency, complexity and comparability?
PANEL IV SPEAKERS
Amir Amel-Zadeh is Associate Professor of Accounting at Saïd Business School, University of Oxford and associate member of the Oxford-Man Institute for Quantitative Finance. Amir’s research broadly investigates the role of financial and non-financial reporting in capital markets. He is also interested in how companies’ sustainability characteristics affect investors’ asset allocation decisions. Prior to joining Saïd Business School, Amir held a position as Assistant Professor at Judge Business School, University of Cambridge. He was visiting scholar at Harvard Business School, at New York University Stern School of Business, and at Columbia Business School, and received his PhD in Finance from the University of Cambridge. Prior to academia Amir worked at Lehman Brothers in London. He has taught or consulted for the financial services industry in the US, Europe, Asia and the Middle East. He is currently academic advisor to PanAgora Asset Management and serves on the board of a fintech start-up. He is teaching on executive programmes on sustainable investing and on bank governance.
Cléo Fitzsimons joined Cazenove Capital in 2012 and now leads the firm’s Sustainable Investment offering. Cléo manages sustainable portfolios on behalf of clients and overseas ESG Integration within its overall investment process. Prior to this she was a portfolio manager for high net worth individuals and large families within Cazenove’s International private client wealth management team.
Cléo holds two business-related Masters degrees from the London School of Economics and ESADE University in Barcelona and is a Fellow of the Chartered Institute of Securities and Investment. Being a native Canadian, Cléo is also fluent in French.
Guillermo Hermida is currently ESG Strategy Director for CaixaBank in the private client area. Prior to this, he was CIO for CaixaBank AM for 15 years, the last two focused on SRI. Previously, he was Head of Equities at Santander AM. He started his professional career at BBVA, as a sales trader of stocks for Spanish institutional clients, before moving on to the proprietary investment area of BBVA. Mr Hermida has a degree in economics from the Santiago de Compostela University and a diplôme des hautes études européennes from the College of Europe in Bruges. He is a Chartered Alternative Investment Analyst (CAIA) and Certified Environmental, Social and Governance Analyst (CESGA) by EFFAS.
Michael is the chairman of the UK Sustainable Investment and Finance Association (UKSIF), TCR Innovations, vice-chair of the Natural Capital Coalition, and former CEO of the Global Reporting Initiative (GRI) and Carbonetworks. He is a senior adviser to funds, companies, and governments around the world on approaches to sustainable finance and impact.
Gordon Power is co-founder of Earth Capital Holdings and Chief Investment Officer of Earth Capital Ltd. He is responsible for the global investment activities of the firm.
Gordon has over 35 years’ of private equity experience. He founded ProVen Private Equity (now re-named Beringea) and led its buy-out from Guinness Mahon acting as CEO and CIO until the firm’s sale. In 2003. ProVen had funds under management of $340m. Gordon’s investment track record extends to over 256 investments made over the last 35 years, generating an IRR of 28.5%. During this time he has made 33 investments in sustainable technology within areas such as forestry, plastic recycling and eco-friendly building materials and brand packaging which have generated an IRR of 45%.