ESG: Financial sector is reshaping – and creating information channels
It was only a year ago that ESG dominated the headlines in the financial industry. In view of global crises ranging from the Ukraine war to inflation, however, its presence in the media has rapidly declined. Nevertheless, renewable energies are supposed to make people less dependent on Russian gas and are therefore increasingly favoured by investors. “The industry is vigorously working on the conversion, because the topic is becoming increasingly important for advisors as well”, says Andreas Pál, Senior Vice President and Head of Sales at Moventum S.C.A. It is for this reason that Moventum has greatly expanded its relevant services.
“Accurately analysing the sustainability of assets, via mechanisms like ESG ratings, is becoming increasingly important to our advisory community”, says Alexander Cowan-Sanluis, CEO of Platform One in UK. That is why the information density at Moventum is significantly increased: “MoventumOffice offers ESG fund rating with Morningstar Sustainability Ratings and Scores”, Pál points out. “Each product can be assessed according to its ESG score and compared to other products.” The Morningstar approach benefits from the fact that a sustainability rating is given to any fund where more than half of the included investments are rated by “Sustainalytics”, and which is in a Morningstar category with at least ten rated funds. The rating is therefore not limited to funds with an explicit sustainability focus.
“The universe of sustainably investable target funds is continually growing”, says Pál. “As the products themselves have to be certified before the new classification is visible in the portfolios, asset managers are obviously a bit behind.” As of 31 May 2022, 47 per cent of the target funds used met the Article 8 or 9 criteria. “In the meantime, we stand at more than 51 per cent in many portfolios”, Pál highlights.
Other criteria are equally important. “It is not sufficient to simply add green or ESG-compliant products to the portfolio”, says Pál. “We also place high standards on our business activities and have defined ethical guidelines for Moventum Asset Management S.A.” Furthermore, other exclusion criteria such as child labour or drugs are defined for the portfolios. “Overall, this puts us on a very high level”, Pál concludes.
“The regulatory landscape around ESG is constantly evolving, so that we familiarise advisors with the relevant requirements and offer them useful tips for implementation in practice”, Pál mentions. This is also something that is urgently needed, as the topic as a whole is not yet catchy enough and the information still too diffuse. Distinct classification is therefore urgently needed. “Partnering with a firm like Moventum allows us to offer our overseas clients with access, comparative tools and ultimately a business that takes its own medicine when it comes to implementing ESG guidelines. That is important as being able to sort the wheat from the chaff is becoming difficult, particularly with the rise of greenwashing by product providers”, says Alexander Cowan-Sanluis, CEO of Platform One.
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