How important is it that the fund industry takes action on ESG now?

“It is important that we all move towards a more sustainable and social world. The risk with ESG however is that the fund industry uses these products for marketing reasons only rather than change of mentality. 

ESG is not only an initiative, but a global shift affecting all industries. Today’s generations have built a different awareness for ESG-related factors such as sustainability and social impact.

We find ESG-driven decisions, for example, in manufacturing industries like constructions or automobile, but moving the investments into the right direction is equally important. Offering ESG-based investment products will be essential in the future and might become a new standard.

In conclusion, there is a demand for ESG and the industries will need to work together to make this change. Thus, the fund industry does play an important role, and it is absolutely necessary to take the appropriate actions. 

How close are we to the point mainstream investors value ESG credentials over the above absolute returns?

“I believe that the next generation of investors will no longer accept just any kind of fund. They want to know that their investment has had an impact. I, possibly naively, think that they prioritise purpose over profit. 

There is more focus on ESG-related investments today but considering ESG criteria should not necessarily mean a lower return. We believe that the decision-making process of mainstream investors could be a combination of both sides. ESG aware investors might therefore choose the best performing products within the offered ESG product range.

What are the biggest challenges for asset managers and service providers right now?

“There are many challenges which are being faced by the asset managers and the service providers at the moment. There have been many uncertainties about the new regulatory requirements and questions around the data collection which had to be addressed while the implementation time was limited. 

In parallel, ESG is not only a national but also global topic. The interpretation and implementation of ESG requirements is not identical everywhere, i.e. a harmonisation process between the different markets is required.”