Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

ESG investment survival guide: Swiss experts reveal all

Citywire Switzerland speaks to advisers, microfinance specialists and fund managers about the ins and outs of Swiss ESG investing.

Environmental, social and governance factors are increasingly coming to the fore in Swiss investment portfolios.

Citywire Switzerland has talked to a wide range of investment experts from independent asset managers and fund providers to microfinance specialists who attended the Geneva Forum for Sustainable Investing 2016.

In its seventh year running, the event co-hosted by Voxia Communications and Conser Invest, saw about 300 investment professionals and ESG trend setters gather from all over Switzerland.

Swiss independent boutique Conser Invest talked about the growth of ESG within Switzerland, while Sycomore AM revealed the pitfalls to avoid for newcomers.

Meanwhile, Symbiotics AM divulged the impact ESG can have in the microfinance context and RobecoSAM’s Dominik Scheck gave his top tips for ESG beginners.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Swiss Initiative

Angela de Wolff, Conser Invest

Fundamental growth is happening in Switzerland. The numbers confirm the trend, with assets under management more than doubling since last year.

Transparency and traceability of investment are important, as the publication of the new Swiss Foundation Code for private foundations confirms this evolution.

In the past 12 months I think there has been a movement confirming that sustainable finance or responsible investment is not just marginal and nice to have but there is something more structural happening.

I would say that historically Switzerland has been on the leading edge, but we missed sometimes what’s happening outside and the momentum has remained a little slow.

Banks and large asset managers have developed their own tools and teams, but often medium sized institutions like IAMs or small banks cannot offer the full package and have limited internal resources to treat this topic.

So there is space for independent advisers as we are to provide full ESG package to these small players willing to outsource this competence.

Presently, despite the market turmoil or increasing constrains for financial players, there is a chance/opportunity to invest in what future will require; the next generation of investors will be much more sensitive to innovative, transparent and sustainable investment solutions.

Missing this trend by focusing one’s full energy on today’s dilemmas will mean losing momentum in acquiring new clients.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Pitfalls to avoid

Jean-Guillaume Peladan and Bertille Knuckey, Sycomore Asset Management

When considering ecology or environmental sustainability, the first obstacle to overcome is prejudice, and there are also methodological traps and several pitfalls to avoid.

Having a carbon-only approach can be misleading. If you focus on a single environmental objective such as climate change caused by greenhouse gases, you will favour diesel over gasoline because diesel generates a lower carbon footprint per kilometre.

But diesel engines produce more gaseous nitrogen oxides and fine particles which cause damage to human health and are not taken into account in greenhouse gases.

Broadly speaking, when screening environmental performance, a multimetric approach is required in order to integrate not only greenhouse gases emissions but also air quality, water scarcity, resource depletion, land degradation and biodiversity losses.

Today, it is tempting to take the easy route. When trying to decarbonise their portfolio, fund managers tend to compute available data on greenhouse gases without questioning neither the scope nor the comparability of these data.

We strongly believe that a company will deliver sustainable performance if it creates value for all its stakeholders: its suppliers, people, investors, clients and the environment (SPICE).

An example of a sustainable company with a high SPICE rating is Ontex, a Belgian company that produces hygiene products.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Impact investing

Fabio Sofia and Daniel von Moltke, Symbiotics

I think access to capital is fundamental for any person and any business. But actually in certain countries today, especially in Africa, 80% of people don’t have access to formal finance.

If you now take on the value chain from the micro entrepreneur to the investor, naturally through microfinance funds, the investor suddenly has access to the growth of this person. You could say the growth of these people is quite sustainable because it’s natural.

You can imagine that when you have an investor here in Geneva investing $1 million, which is a lot for a private company but not necessarily for an institutional investor.

If you invest $1 million, that gets access to about 10,000 people in remote areas in developing countries, because we have an average $1,000 loan. These people get a sustainable access to capital which truly supports productivity at their level, so it’s very healthy.

Historically, microfinance was used as a development tool by agencies and the story was about how to help women improve their lives and independence. And by supporting women, it is proven that they are good repayers, in fact they typically pay much better than men.

Culturally, women tend to control and manage the family budget while the man brings back some money but also uses the money for his own consumption habits.

Microfinance is often considered as a way to empower women in emerging markets.

If you look at the Unctad World Investment Report 2014, for example, the total investment needed to achieve the UN Sustainable Development Goals (SDGs), which target 2030, is estimated at $3.9 trillion per annum.

In comparison, Overseas Development Assistance accounts for only approx. $140 billion per annum. This implies that the private sector has an immensely important role to play in overcoming this financing and investment gap to achieve the SDGs.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Top tips

Dominik Scheck, RobecoSAM Senior Client Portfolio Manager – Sustainability

The main point is you don’t have to give up performance if you want to create a positive impact.

A lot of people think sustainability means you look at polluters, child labour and so one but it is more than that.

Sustainability means that you look for companies that of course consider social effects and environmental effects but also companies that profit in 10 years’ time, in 20 years’ time.

Our favourite example is a German software company, Sap. With respect to social issues, they are very much leading so they have specialised programs where they try to increase the number of women in the work force, at the same time they are leading in terms of technology and innovation.

Three key tips for impact investing:

  1. You need to have a clear intention
  2. You need to be able to measure that impact. At the end of the year you need to see how the company has improved
  3. You need also to be profitable. If you want to do something good, you make a donation but if you want to invest your money then you expect financial returns

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Events
  • Citywire DACH 2016

    Citywire DACH 2016

  • Citywire Switzerland 2016

    Citywire Switzerland 2016

  • Citywire Zurich Alt Ucits 2016

    Citywire Zurich Alt Ucits 2016

  • Citywire Zurich Alt Ucits 2016

    Citywire Zurich Alt Ucits 2016

  • Citywire Zurich Alt Ucits 2016

    Citywire Zurich Alt Ucits 2016

  • Citywire Montreux 2016

    Citywire Montreux 2016

  • Citywire Montreux 2016

    Citywire Montreux 2016

  • Citywire Montreux 2016

    Citywire Montreux 2016

  • Citywire Zurich 2016

    Citywire Zurich 2016

  • Citywire Zurich 2016

    Citywire Zurich 2016

  • Citywire Zurich 2016

    Citywire Zurich 2016

  • Citywire Switzerland 2015, Gstaad

    Citywire Switzerland 2015, Gstaad

  • Zurich Forum 2015

    Zurich Forum 2015

  • Zurich Forum 2015

    Zurich Forum 2015

  • Geneva Roundtable 2015

    Geneva Roundtable 2015

  • Geneva Forum 2015

    Geneva Forum 2015

  • Geneva Forum 2015

    Geneva Forum 2015

  • Citywire Gstaad 2014

    Citywire Gstaad 2014