“Comprised of 5 Working Group papers and 3 standalone papers, this comprehensive report delves into the intricacies of Environmental, Social, and Governance (ESG) investing, shedding light on the challenges and opportunities within the investment landscape.”
Context
The Fide Foundation, backed by key players from the financial industry, created at the 2022 Oxford Congress the GET-2 Global ESG Think-Tank, with the sole purpose of analyzing the main challenges that sustainable investment poses, to propose actionable solutions at the 2023 Oxford Congress which took place in September.
As the global consciousness shifts towards sustainable practices and responsible investment, the financial sector must address the key obstacles hindering progress. Guided by the comprehensive research and insights of the GET-2 ESG Think-Tank, the congress showcased multidisciplinary working groups, each presenting their proposed solutions to the seven critical ESG challenges identified.
Through engaging discussions, collaborative workshops, and thought-provoking presentations, the 2023 Oxford Congress provided a platform for knowledge exchange, innovative ideas, and tangible solutions. By embracing the complexities of ESG challenges head-on, we strive to shape a more sustainable and responsible future for the financial industry.
Now, after months of thorough analysis and work by the working groups and participants of the GET-2 think-tank, the full report of the Oxford/23 Congress sees the light of day.
Actionable Solutions
Comprised of 5 Working Group papers and 3 standalone papers, this comprehensive report delves into the intricacies of Environmental, Social, and Governance (ESG) investing, shedding light on the challenges and opportunities within the investment landscape.
The report (read here) is enriched with insights from five specialized working groups, each focused on a distinct facet of ESG investing, and it extends actionable recommendations for the investment industry to navigate ESG challenges.
Key Findings
- Impact of ESG Regulation on Asset Managers: ESG regulations have necessitated a profound revaluation of the fundamental pillars of asset management. This encompasses investments, organizational structure, governance, product development, and relationships with clients, providers, employees, and regulators.
- Transformation in Relationships: ESG investing has significantly transformed the relationships between investment firms and their clients, providers, and regulators, reflecting a paradigm shift in the industry’s dynamics.
- Challenges in the ESG Transition: The shift towards a new ESG paradigm has introduced substantial challenges, including global fragmentation in ESG taxonomy, the demand for reliable metrics, and the integration of ESG factors into investment decision-making.
- Energy Transition Challenges: The transition from fossil fuels to a clean energy economy emerges as a pivotal challenge, requiring a holistic approach to ESG investing that carefully considers the risks and opportunities inherent in the energy transition.
- Simplification of ESG End-Investor Profiling: There is a growing demand from distributors to simplify sustainable end-investor profiling. The report underscores the necessity for a standardized framework for ESG disclosure and reporting, ensuring consistency across diverse regions and industries.
Recommendations:
- Develop a Standardized Framework: Create a unified framework for ESG disclosure and reporting to enhance consistency across regions and industries.
- ESG Integration in Decision-Making: Integrate ESG factors into investment decision-making and risk management processes, considering the unique characteristics of different asset classes and investment strategies.
- Enhance Transparency: Promote transparency and accountability in ESG investing by providing reliable ESG metrics and ratings.
- Encourage Collaboration: Foster collaboration and knowledge-sharing across the investment industry to promote innovation and best practices in ESG investing.
- Support for Clean Energy Transition: Support the transition to a clean energy economy by investing in renewable energy and other sustainable technologies and establishing a standardized framework for evaluating the cost of transitioning to a clean energy economy.
- Comprehensive Approach to ESG Commitment: Tailor ESG strategies to effectively encourage commitment among end-investors, acknowledging the diverse challenges and motivations influencing their ESG engagement.
- Enhancing Impact Measurement for Sovereigns and Social Bonds: Develop specific indicators tailored for sovereigns in emerging markets and refine social bond frameworks to better measure and communicate impact.
By adopting these recommendations, the investment industry can contribute significantly to creating a more sustainable and transparent future. This report serves as a compass, guiding the industry towards impactful ESG investing and global sustainability, with a specific emphasis on fostering ESG commitment among end investors.
Meet the professionals behind the project
This document has been prepared by professionals who are part of the Fide Foundation’s Global ESG Think-Tank Road to Oxford Programme. In this section, we wish to highlight them all, acknowledging their vast contributions to the project.
Find here the complete list of professionals who have participated in this document, either by being part of one of the working groups or by having attended the 2023 Oxford Congress and shared their views with the rest of the congress attendees.
We wish to thank them all for their invaluable insights, with a special acknowledgment to all the Working Group Leaders (highlighted in green):
Directors:
- Juan Ramón Caridad, Member of Fide´s Board. Managing Director at GAM Investments
- Ana Rivero Fernández, Global Technical Coordinator of the Global ESG Think-Tank – GET-2
- Cristina Jimenez Savurido, President and Founder of Fide Foundation
Participants:
- Pablo Alonso Montes, Senior Manager in KPMG
- Eduardo Antón, Vice President – Product Solutions – Wealth Management. Itaú Unibanco IEB
- Sergio Aratangy Rosenberg, Head of Financial Division, Chilean Pension Funds Superintendence
- Guillermo Arthur, President of the International Federation of Pension Fund Administrators (FIAP)
- Rita Azahar Hamden Villalobos, Responsible Consultant at Novaster Mexico
- Marisa Balzarini, Head of Sustainability at Sura Asset Management
- Clotilde Bobineau, SRI Analyst at VidaCaixa
- Elena Carranza, Marketing Manager Iberia, Columbia Threadneedle
- Víctor Augusto Cos Montiel, CFA. Director of Risk Management Process Supervision and Financial Inspection at CONSAR
- Guendalina Boris, Chairwoman and General Director of Inversis Gestion
- Eric Borremans, Head of Environmental, Social & Governance, Pictet Asset Management
- Álvaro Carbón Ripepi, Executive Director of GAM Investments
- Rodrigo Chávez, Head of the Financial Risk Department at the Superintendency of Pensions of Chile
- Mike Clark, Founder Director, Ario Advisory
- Ben Constable-Maxwell, Head of Impact Investing, M&G Investments
- Clara Crespo Ruiz de Elvira, Economic and Commercial Counsellor, Embassy of Spain in Washington DC
- David de Miguel Rato, Deputy Director, Policy and Sustainable Finance, CNMV
- Carlos Diaz Núñez, Global Hed of Product in Santander Asset Management.
- Raúl Alfonso Espinoza Estrada, Head of Strategy Investments at Operadora de Pensiones Complementarias de la CCSS
- Carolina Fernández, Co-head of ESG and sustainable finance unit and Senior expert in regulatory and public affairs at Inverco
- Sandra Fernández, Marketing & Client Servicing Manager at Pictet Asset Management
- Guillermo Fernández Zubia, Financial Sector Analyst at The World Bank Group
- María Pilar Galán Gavilá, Partner Head of Financial Services Legal at KPMG Spain
- Carlos Garay Gómez-Arroyo, Responsible for ESG investments at Sabadell Urquijo Gestión
- Eduardo García Hidalgo, Global Chief Investment Officer at BBVA Asset Management
- Rubén García Páez, Head of Iberian & Latam Distribution at Columbia Threadneedle
- Alberto Gómez Reino, Head of Sustainable Investments at BBVA AM
- María José Gómez Yubero, Head of Resolution, Benchmarks and Financial Stability Issues at the National Securities Market Commission (CNMV). Academic advisor to Fide
- Andrea González González, Deputy Director General at SpainSIF
- Luis González González, Head of Sustainability at BBVA Quality Funds
- Asunción González, Head of Economic Studies at AMAFORE
- Eva M. Gutiérrez, Lead Financial Economist at the World Bank. Member of Fide’s International Academic Council
- Ana Guardia, Head of Capital Markets, ICO
- Ana Guzmán Quintana, Head of Impact Investments, Portocolom AV
- Guillermo Hermida, Head of ESG, La Caixa
- Sara Margarita Hernández Hernández, Project Leader in the General Directorate of Financial Risk Management at CONSAR
- Rocío Jaureguizar Redondo, Sales Manager and ESG Specialist at Pictet Asset Management
- Benjamin Kelly, Director of ESG & Impact Columbia Threadneedle Investments
- Philip Kemp, Investment Writer at M&G Investments
- Naomi Kwan, Sales Support and interest in ESG at M&G
- Philippe Le Gall, Senior ESG Engagement Specialist at Pictet Asset Management.
- Florencia López André, Risk Control Manager at ATL Capital
- Stephanie Maier, Global Head of Sustainable and Impact Investment, GAM Investments
- Jaime Martínez Gómez, Global Head of Asset Allocation. BBVA Asset Management
- Roberto Mendoza, Investment and Risk Director at AMAFORE
- Gonzalo Meseguer Muñoz, General Manager at Santalucía AM
- Daniela Mohr, Senior Responsible Investment Analyst at AFP Cuprum
- Carlos Montalvo Rebuelta, Partner PwC
- Javier Moraga Ramírez, Head of Fund Selection & ESG Integration at AFP Cuprum
- Carlos Moreno, Sales Director Iberia, Columbia Threadneedle Investments
- María Noel Urban, Alternative Asset Investment Specialist, AFAP SURA
- Eric Osio Cerón, General Director of Risk Management at CONSAR
- Laura Palomo Aguado, Legal Advisor at the Spanish Association of Collective Investment Schemes and Pension Funds (Inverco)
- Valdemar Perot, Investment Analyst at AFP HABITAT
- Cristian Ramírez, Financial Risk Analyst at the Superintendency of Pensions of Chile
- Gonzalo Rengifo Abbad, Head of Distribution – Iberia, LatAm at Pictet Asset Management
- Paula Rienzi, Credit Risk Specialist at SURA Uruguay.
- Gizelle Rivera Contreras, Deputy Director of Financial Research at the Financial Vice-Presidency of CONSAR
- Ignacio Rodríguez Añino, Responsible for the Commercial Development of M&G Investments in Spain and Latin America
- Laura Sacristán Martín, Chief Commercial Officer at Grupo BME-SIX. Academic Advisor to Fide
- Gloria Sánchez Soriano, Senior Advisor of the Digital Finance Department at the Institute of International Finance – IIF
- Agustín Sheppard Gelsi, Chief Risk Officer of UniónCapital AFAP
- Faisel Syed, ESG Specialist at Pictet Asset Management
- Manuel Tabilo, Research Manager at FIAP
- James Upton, Senior Corporate Governance Specialist, Pictet Asset Management
- Belén Vila Martínez, Fund Analyst in Banco Santander
- Manuel Zapata, Financial Analyst at the Superintendency of Pensions of Chile
Members of Fide’s team that have participated in this initiative:
- Alvaro Arribas, Marketing and Digital Development at the Fide Foundation
- Cristina Arribas, Academic Coordinator at the Fide Foundation
- Victoria Dal Lago, Academic Director at the Fide Foundation
- Carmen Hermida, Managing Director at the Fide Foundation
- Lucía Hernández, Academic Coordinator at the Fide Foundation
- Blanca Jimenez, Marketing Assistant at the Fide Foundation
GET-2 ESG Think-Tank Collaborating Entities
Columbia Threadneedle Investments
Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of actively managed investment strategies and solutions for individual, institutional, and corporate clients around the world. Our focus is on meeting our client’s expectations through a team-based, risk-aware, and profit-oriented approach.
With a workforce of more than 2,000 employees, including more than 450 investment professionals based in North America, South America, Europe, and Asia, we manage assets in equities, fixed income, asset allocation solutions, and products—alternatives from emerging and developed markets.
Columbia Threadneedle Investments is the global asset manager of Ameriprise Financial, Inc. (NYSE: AMP), a leading U.S.-based financial services company. Being part of Ameriprise, we are supported by a large financial services company widely diversified and capitalized.
Pictet Asset Management
Pictet Asset Management is an independent asset manager, overseeing investments across a range of equity, fixed income, alternative, and multi-asset products on behalf of our clients, whose purpose is to build responsible partnerships with our clients, colleagues, communities, and the companies in which we invest.
They are part of the Pictet Group, an investment-led services group founded in Geneva in 1805 whose unique partnership structure has provided the stable foundation for long-term thinking.
GAM Investments
GAM Investments is an independent, pure-play asset management group created in 1983 with the purpose of protecting and enhancing our clients’ financial future. GAM’s core investment strategies focus on fixed income, equity, multi-asset & solutions, and systematic, and include environmental, social, and governance (ESG) factors. By attracting and empowering the brightest minds to think beyond the obvious, GAM strives to provide investment leadership, innovation, and a positive impact on society and the environment. By living our purpose every day, we believe that we can realise our vision of building the most respected specialist active investment manager and trusted solutions and services platform in the world.
M&G Investments
M&G Investments is a global asset manager, serving customers and clients for more than 90 years since launching Europe’s first-ever mutual fund back in 1931. We’re part of M&G plc, a family of brands, all aligned behind the same ambition: to manage our customers’ investments so that they can live the life they want while aiming to make the world a little better along the way. Through long-term active investment management, we build solutions around what matters most to our customers and clients, looking for the best opportunities to invest in, across a wide range of asset classes.
FIAP
The International Federation of Pension Fund Administrators (FIAP) brings together the associations and entities that manage pension funds from 10 countries (Bolivia, Costa Rica, Chile, El Salvador, Spain, Kazakhstan, Mexico, Peru, the Dominican Republic, and Uruguay). Its objective is to collaborate in the improvement and consolidation of pension systems based on individual savings, to offer the best possible pension to workers, within a financially sustainable system, and to contribute to the economic growth and development of the countries.
Instituto BME
Instituto BME is BME’s training center and a close collaborator of the National Financial Education Plan in Spain. It focuses on training services relating to finance and financial markets. The training programs promoted by Instituto BME are aimed at professionals in the financial sector and its regulatory bodies, individual investors, students, and anyone interested in entering or deepening their knowledge of the world of finance. Instituto BME further expanded its course platform Braindex, which offers an online educational environment. Braindex offers 85 courses with different levels. Around 25% of the courses on Braindex are accessible free of charge. All the courses both in Instituto BME and Braindex have the following thematic axes: markets and products, technology applied to financial markets, and financial regulation. In this way, BME facilitates the development of society’s financial skills, promoting a better understanding of financial products, concepts, and risks through training, instruction, and advice.
Source: https://thinkfide.com/fides-get-2-esg-initiative-produces-its-first-report-on-overcoming-the-main-esg-investing-challenges/
