The findings of a recent survey by CFA Institute, where around 1,500 portfolio managers and research analysts worldwide have been interviewed, revealed that 73% of the respondents take Esg issues (environmental, social and governance) into account in their investment analysis and decisions. In a similar survey CFA Institute itself carried out in 2015 the percentage was the same.
But recently Justin Sloggett, Head of Public Markets at the PRI (the Principles for Responsible Investment launched by the United Nations in 2006, now gathering more than 1,800 investment organizations, divided among asset owners, investment managers and service providers), said: “There is still a lot of misunderstanding about what Esg factors are and how they can be incorporated into day-to-day decision making by financial analysts”. That’s why the PRI in partnership with CFA launched a series of global workshops for professional investors focusing on Esg.
And according to another recent survey (more than 1,000 individual investors responded) run by Ipsos for Vigeo Eiris and the French Sif (Sustainable investment forum), whose results have been publicised during the latest French Sri Week (France is the most important market in Europe with regard to sustainable and responsible investments), even though 49% of retail investors consider their financial advisor to be the most appropriate person to inform them about sustainable and responsible investment, only 3% of the respondents were offered Sri solutions by their financial institution.
The list of surveys and researches of this kind could be long. The very question is: are Sri and Esg really a mainstream concern among finance and investment professionals? Are Sri and Esg part of there day-by-day work? I believe a reasonable answer to that question could be that in the near future (whether in 1, 3, 5 years I can’t say, but I don’t think later) Sri and Esg will absolutely have to be a major concern for investment professionals. So far, it’s not so clear. It seems to all depends on who’s answering. And where.
In that respect, in October in Italy a groundbreaking initiative saw the light. Altis, the Postgraduate School Business & Society of the Università Cattolica del Sacro Cuore in Milan, launched a Master focused on Sri (you can call it #MasterSRI the Twitter way). It represents an Italy’s first. On the kick off day, October 11th, a dedicated event was held in Altis to present the main reasons, features and objectives of the Master, with all the students of the Master attending. Some distinguished speakers came to Altis on that occasion, among others Lorenzo Saa, Director Global Networks & Outreach at the PRI.
The very fact that the Master has been launched proves at least two relevant and clearly connected things.
On the one hand, it means there’s a need to educate financial and investment professionals, not only the youngest ones (but with the youngest is easier, of course, that’s a matter of mindset), with regard to sustainable and responsible investment. The reason is that so far in Italy Sri and Esg principles, criteria, practices, although they have a twenty years history (the first Sri funds were marketed in Italy exactly 20 years ago, in 1997), still represent something the majority of financial professionals, operators, players at different levels (asset managers, analysts, consultants, advisors, investor relators, marketing and communication specialists, proxy voting and stakeholder engagement specialists etc.) are not properly and structurally skilled in. Sri and Esg seem mainstream when they talk, and much less mainstream when they act in their everyday’s business.
On the other hand, it means that the market is going definitely in that direction: Sri and Esg are here to stay and become more and more relevant, the future is mapped. As a consequence, everybody must start thinking about how to integrate sustainable and responsible principles and criteria at each stage of the investment process. And skilled people are needed to do that.
Alongside PRI in Person, that was the main event, in late September in Berlin the PRI Academic Network Conference took place. The network gathers from all over the world a big number of academics focusing on Sri and Esg matters. It was really impressive and fascinating in Berlin – I had the chance to get there as a Faculty member of the #MasterSRI – to see in how many directions academic studies and researches are going with regard to Sri and Esg. Few meters away from the rooms where academics were presenting their latest studies and findings, some of the biggest world’s financial players were debating the future of Sri and Esg at PRI in Person (next step San Francisco in 2018). I think a very positive dialogue is underway between academics and the investment community with regard to Sri and Esg matters, in Italy as at a world level. And thanks also to this dialogue a new generation of Sri professionals, and future Sri leaders, is coming.
(the post has been originally published in Spanish on AGORA, Inteligencia colectiva para la sostenibilidad)