Friday, December 3

Fight for the climate and earn money

The asset management industry embraces socially responsible investing, setting an ESG roadmap in the light of growing customer demand. Principles that investors have increasingly adapted to their portfolios.

To analyze its contribution and the opportunities it offers, the Foro Social Investor was attended by representatives of three prestigious international management companies Edmond de Rothschild, Nordea y Federated Hermes, with a wide portfolio of funds in which to find ways to channel your investments.

“We have many tools, and we also have duties when it comes to following the climate roadmap set at COP 26,” he explained. Sebastian Senegas, head of Southern Europe at Edmond de Rothschild.

The manager is committed to investments that “respect the objectives”, excluding those companies that deviate from this strategy.

«At a first level we have well-defined ESG indicators; in the second, ‘engagement’, working with companies that want to collaborate, “he said. Carlo Fassinotti, Marketing Manager and ESG Expert at Nordea, whose policy is to invest in ‘transitional’ companies.

Charles Chapel, head of business development and distribution at Federated Hermes, explained that the manager includes a combination of investments.

“There are more and more companies fighting climate change, but historically there have not been that many,” he explained. “It creates a much larger universe to be able to invest in companies whose objective is not climate change, but who are becoming interested in how they can contribute. There you can get involved with them, try to improve them and make a very long-term path, “he said.

Customer demand prompts the largest management companies to adapt their products to meet the challenges of climate change. Edmond de Rothschild, Nordea and Federated Hermes are leaders in ESG finance and transition (photo: INVESTMENT).

Investors find another alternative in the so-called green debt, a form of bonds that more and more companies – and governments – are beginning to carry out.

“For issuers it is interesting because there is a lot of demand. The same thing happens to companies, there is a green premium. It is a way of forcing the company to comply with what it says and to be more responsible when announcing its commitments, “explained Carlos Capela.

Although the issuance of this type of debt is an important step for the industry, it is not without risks. Among them, that of a green bubble in this type of investment.

It’s the million dollar question. All the studies show that the companies that have the best score in socially responsible investment are the ones that have given the best results over the last 10 or 20 years, and even during the pandemic, ”said Sebastian Senegas.

He also recognized that the companies that have turned to this section will have many more business opportunities compared to those that have not yet taken positions.

“In the future we will no longer speak of a bubble when the entire industry is ESG,” explained the representative of Edmond de Rothschild. Fears that Carlo Fassinotti also alienated. “There will be a time of consolidation, but I don’t think there will be a bubble,” he said. Around specific investment opportunities, they are varied.

Where to invest

Sebastian Senegas recalled that Edmond de Rothschild launched a year ago ‘Green New Deal’, an article 9 fund, the highest grade in terms of ESG criteria granted by European regulation.

“They are leading companies now, focused on compliance. Not only companies that meet the objectives ‘strictly’, but those that evolve in favor of it, “he explained.

He also mentioned a commitment to the future, the so-called ‘green tech’ or green technology, of which “much will be said.”

“We have an article 9 that looks for companies that generate impact through the service they offer,” said Carlos Capela. This fund, Federated Hermes Impact Opportunities Fund, has 32 companies and will be four years old in December.

“It has a part in energy transition, another in health and well-being, such as treating pandemics such as diabetes, but also parts in waste management, water and financial services,” explained the expert.

Regarding Nordea, Carlo Fassinotti highlighted one of the funds of the manager, Global Climate and Environment. “I think solutions of this kind are lacking. It is a combination of climate and social change. The social part is very important to us, for the first time in our pan-European survey it was one of the most important topics ”, he revealed

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