The rise of ESG is prompting some bold headlines: “Almost 60% of mutual fund assets will be ESG by 2025.” “ESG funds forecast to outnumber conventional funds by 2025.” “ESG as it is today won’t exist in 10 years – it will be the norm” and so on…
But viewing the unprecedented growth of ESG in such binary terms can be misleading. The transition towards ESG is real, yet it is also nuanced and multi-faceted, with complexity for both financial intermediaries and end customers.
Asset managers and intermediaries have a range of opinions about ESG and are at different stages in the journey towards embracing the concepts. An advisory firm taking its first (possibly reluctant) steps are bound to be in a very different place from the early adopters now refining their sustainable investments propositions. Plenty of asset managers have told us that ESG has been embedded in their products for decades – but does their approach still meet the developing demands of their customers?
Market players need to understand the range of perspectives, especially as they evolve even more rapidly with COVID-19. Advisers and DFMs should revisit their suitability processes and asset allocation models. Portfolio managers anxious to dispel investors’ concerns about ‘greenwashing’ need to review the adequacy of their fund research. And the messages to clients will need to be clear to manage their expectations. Some clients regard ESG as branch of ethical investing, while others are growing to regard it as more of an investment de-risking strategy. So there’s potentially lots of scope to please or disappoint customers.
Platforum will be conducting research on ESG developments during the next few months. What key questions and concerns have arisen for you and your firm in the past 12 months – whether you’re an adviser, a wealth manager or an asset manager?
We would welcome your thoughts.
The rise of ESG is prompting some bold headlines: “Almost 60% of mutual fund assets will be ESG by 2025.” “ESG funds forecast to outnumber conventional funds by 2025.” “ESG as it is today won’t exist in 10 years – it will be the norm” and so on…
But viewing the unprecedented growth of ESG in such binary terms can be misleading. The transition towards ESG is real, yet it is also nuanced and multi-faceted, with complexity for both financial intermediaries and end customers.
Asset managers and intermediaries have a range of opinions about ESG and are at different stages in the journey towards embracing the concepts. An advisory firm taking its first (possibly reluctant) steps are bound to be in a very different place from the early adopters now refining their sustainable investments propositions. Plenty of asset managers have told us that ESG has been embedded in their products for decades – but does their approach still meet the developing demands of their customers?
Market players need to understand the range of perspectives, especially as they evolve even more rapidly with COVID-19. Advisers and DFMs should revisit their suitability processes and asset allocation models. Portfolio managers anxious to dispel investors’ concerns about ‘greenwashing’ need to review the adequacy of their fund research. And the messages to clients will need to be clear to manage their expectations. Some clients regard ESG as branch of ethical investing, while others are growing to regard it as more of an investment de-risking strategy. So there’s potentially lots of scope to please or disappoint customers.
Platforum will be conducting research on ESG developments during the next few months. What key questions and concerns have arisen for you and your firm in the past 12 months – whether you’re an adviser, a wealth manager or an asset manager? We would welcome your thoughts.