How ESG is reshaping the investment industry
On January 17th, Fidelity organized a Sustainable Investment Conference in co-organization with LuxFLAG. Sanela Kevric (Fidelity Luxembourg) welcomed Mario Mantrisi (LuxFLAG), Jane Wilkinson (Luxembourg Stock Exchange), Aela Cozic (Fidelity UK) and Ilia Chelomianski (Fidelity UK) as speakers to discuss about the current state of sustainable investments and its role in reshaping the investment industry.
The speakers assessed the importance of business-relevant sustainability issues and how ESG contributes to long-term financial performance. For the investment industry, as far as ESG strategies are concerned, it became clear during the conference that it is no longer sufficient to exclude specific sectors or companies alone. Active management and ownership of sustainable investment funds are becoming an integrated part of market practice. Sustainable portfolio managers nowadays embrace positive screening aspects into investment decisions paired with ongoing engagement with companies in order to arrive to a well-conceived investment decision. Furthermore, internal ESG specialists and external ESG data become vital to provide relevant insights to fund managers. It was highlighted that especially current growth rates and the financial performance of sustainable investment products give positive signs to the market. In Luxembourg, new initiatives like the International Climate Finance Accelerator and ABBL’s recent pledge for the UNEP FI Responsible Banking Principles strengthen the country's Sustainable Finance Agenda.
The experts highlighted that current developments show that we are heading towards a sustainable (r)evolution with the EU stepping in. The EU Action Plan on Sustainable Finance aims at 3 main objectives: Reorienting capital cash flows toward sustainable investment, mainstreaming sustainability into risk management and fostering transparency and long-termism. Reporting on impact creation and measurement are becoming more and more essential in the future in order to solidify the message of extra-financial performance to investors, especially to the largely untapped retail market. The panel discussion concluded that ESG is no longer just a trend but future proof.
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