The Evolving Power of ESG: Generating Returns and Communicating with Clients

Mar 22, 02:00 PM
This episode is a bit different from our usual format: I recently held a webinar called “The Evolving Power of ESG: Generating Returns and Communicating with Clients”, where we discussed some key areas of interest to fund managers and investors, given the growing momentum, latest trends and key developments in the industry.

I was joint in conversation by Esa Saloranta, Head of ESG and Sustainable Technology at eQ Plc.

The webinar is part of a series in the build up to the ESG Investment Europe Event on 27-28 May in London. 

Make sure you join us at the event if you can make it.

This is another initiative we have taken at ILA & Partners in partnership with Reuters Events by Thomson Reuters, to continue with our efforts to promote and scale Sustainable & Impact Investing. 

We hope you enjoy it !

Introduction
Despite progress in creating industry standards and frameworks to help clarify ESG data, individual methodologies for the incorporation within investment decision-making remains ambiguous. This issue is heightened by the evolving demands of increasingly active stakeholders. Communicating ESG to clients in unambiguous and relevant terms has become a priority for leading asset managers.

Listen to this episode to gain an expert understanding of the biggest challenges and best practices in Sustainable & Impact Investing, including: 

  • Setting the Scene & Sharing Preferred Strategies: How variance in defining ‘ESG’ leads to confusion and conflict between investment firms & investors, policymakers, clients and key stakeholders
  • Internal Processes and Policies: How to integrate ESG into an investment company and gain an understanding of the common challenges and obstacles
  • Improving Return Profile Through Building ESG into Your Models: How to integrate ESG factors into your models and decision process, across all portfolios and discuss what has worked best thus far, and where improvements can be made
  • Data Sets as Part of the Investment Process: Understand which services and information are most useful and learn where to source and develop key information both externally and internally
  • Communicating with Clients: How is ESG affecting the communication with your clients and the latest information clients are currently requesting
  • Call to Action: What should investment firms/managers and clients do differently and the practical steps you can implement today to improve your ESG data analysis and communication

Some quotes and highlights
  • “The sustainable revolution is gaining momentum and it now represents the single greatest investment opportunity in all of history.” Al Gore, Generation IM
  • “I believe we are on the edge of a significant capital reallocation of capital… And investors will need to fundamentally reassess portfolios because of sustainability issues.” Larry Fink, Chairman and CEO of Blackrock
  • “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and above all, the durability of that advantage.” - Warren Buffet
  • “Every CEO needs to sit down and come to grips with the fact that if I don’t have teachers to teach the children of my employees, then the best employees aren’t going to come work for our company.” - Chuck Robbin, Chairman and CEO of Cisco
  • Calls To Action:
        1. As an equity fund manager, take a long terms perspective, choose the best companies in the world to go along even in this crisis.
         2. Make demand use our influence as guardians of assets to ask where are the mitigations to existential threats that is surely coming down the line.
          3. How are we using resources and having a net positive impact and to give back to the planet and people, more than which we are using.
           4. Ask what are we doing with our investments and capital allocation, how are we getting the most of our resources long term than we are taking in the short term.
             5. This is the most exciting opportunity we have ever been gifted to solve the world’s most challenging problem in a way that we can, and we get to be a part of it by funding these solutions.

Time Stamps:
[01:40] Intro by Dominic Grocott from Reuters Events
[03:26] JP Dallmnann: Setting the scene of where sustainable investing is and where it is heading
[03:26] About ILA & Partners
[12:10] Esa Saloranta’s background
[17:13] Warren Buffet, Marc Benioff and Chuck Robbins 
[22:08] BCorp is a global movement
[29:01] How Esa started from foundation by rethinking the energy infrastructure fund of the future
[33:48] How to evolve your ESG processes in your investments
[41:15] ESG rating systems and how this impact short term returns
[46:32] How an active investment manager develop their own ESG process
[48:30] CSR reporting and impact on SDGs
[50:36] How to deal with increasing demand for ESG reporting and communicating with clients
[53:02] Sustainability analysis, taking into account people factors as a competitive advantage
[01:01:00] CallS to Action

Useful links:
Webinar on Youtube 
ESG Investment Europe on 27th - 28th May 2020
Previous Reuters Event webinar: Taking ESG Mainstream 
Larry Fink post on Blackrock Investment Institute’ report on sustainability and asset allocation
Esa Saloranta’s Linkedin

Connect with JP Dallmann on Linkedin, Twitter, or Instagram.
Contact us to help you transition into Sustainable & Impact Investing - ILA & Partners
How to incorporate SDGs into your business - Fast Forward 2030
Find talent and careers with impact - Realchangers
Impact Leaders is produced by Podcast Publishing