This article was written in response to an exclusive webinar on the role of ESG in a decade of disruption.
The Bloomberg Women’s Buyside Network hosted an exclusive webinar on the role of ESG in a decade of disruption, featuring Fiona Reynolds, Managing Director, United Nations Principles for Responsible Investment (UNPRI), Dr. Mark Konyn, Group Chief Investment Officer at AIA and Virginie Maisonneuve, Founding Partner, MGA Consulting and Advisory Council Member, Future of Finance (CFA Institute), and moderated by Bloomberg’s Executive Editor, Tracy Alloway.
Joining from London, Singapore and Hong Kong, the speakers delved into many key aspects of ESG investing, including the case for the private sector playing a greater role in recovering from the COVID-19 crisis, and why responsible investing is the only way forward for the buy-side.
Kicking off the discussion with remarks, Fiona Reynolds said, “As we emerge from the crisis, we need to ensure that responsible investment is the only acceptable norm. Now is the time for decisive, collective action. The actions we take over the coming months, perhaps years, will lay the foundations for a stakeholder and sustainable driven global economy – one that aligns people, profit and our planet.”
ESG as the new normal for investing
Highlighting the growing importance of ESG in investing, Virginie Maisonneuve said, “I believe that the crisis is going to be an accelerator of ESG investments; the crisis is putting the focus on resilience, sustainability as well as trust. It has put the emphasis on the ‘S’ of ESG, which is absolutely critical when it comes to welfare of employees and clients and also global supply chains.”
Driving the point home, Dr. Konyn said, “ESG will move very quickly from being a marginal or specialized consideration within an asset program, to being the asset program itself. We are quickly going to collectively realize that this is how to invest if you want to protect your asset from unseen climate events and external risks.” Speaking about how ESG is inextricably linked to the investment ethos at AIA as an asset owner, he said, “Our investment program takes our value proposition, which is to help our customers lead healthier longer better lives, and turns it into an ethos around how we allocate our financial resources. We focus on long-term sustainability, while delivering financial performance.”
The crisis presents the global economy with a chance to ‘build back better’. Ms. Reynolds added that “responsible investors are urging the companies that they invest in to also have a long-term mindset.”
The future of ESG investment
“This is a great PR and communications opportunity to really further the ESG agenda for professional investors, asset owners and fiduciaries,” said Dr. Konyn. “But whether or not it will resonate amongst the broader business community and stakeholders, is an open question,” he added. Elaborating on the role of fiduciaries, he said, “The time has come for fiduciaries to push forward with the ESG agenda. I think they have a responsibility to allocate capital responsibly, and that goes beyond the basic instructions given by the asset owner. They need to make it a broader consideration in their investment decisions or risk longer-term underperformance as an asset manager.”
Asked where she sees ESG Investing a decade from now, Ms. Maisonneuve said, “more AUM, more innovation, more products, more partnership with clients, more dichotomy between stocks of ESG companies and those that are not — I think we will see a lot of bankruptcies of companies who can’t be sustainable, and there should be more regulation to support the private sector to go in that direction.”
“I expect that all investments will become responsible. The pandemic is a stark reminder that without healthy people, without a healthy planet, there will not be a healthy economy. People, profit and planet are all connected, and one must not come at the cost of the other. If you push the needle too much off centre, you have to be prepared to pay the price. To me, nature strikes back, and nature always ultimately wins,” concluded Ms. Reynolds.
Bloomberg Women’s Buy-side Network (BWBN) is an informal community for women in asset management in Asia. Launched in 2018 in Singapore, the network has expanded to local chapters in India and Hong Kong, helmed by some of the most influential buyside leaders including Virginie Maisonneuve and Dr. Mark Konyn. BWBN convenes women in the buyside on global investment trends, serves to promote inclusion in the industry and educate on the diversity of buyside careers through active mentorship. To find out more, please email bwbnhk@bloomberg.net or check out www.bloomberglp.com/bwbn.
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