Funds Industry Report - Flipbook - Page 21
Sean Hawkshaw KBIGI
potentially bring signicant benets to both
now being reected in asset ows.
the funds administration and investment
This is a global trend being driven by a
management sectors.
number of factors. Obviously there’s a much
greater awareness of climate related issues.
Until
relatively
recently
the
concept
of
There’s a new generation of analysts, consult-
responsible investing or ESG was very much
ants and investment managers who are
outside the mainstream and motivated by
recognising that climate related risks are not
concepts of philanthropy, social justice and
extra nancial factors but factors that actual-
ideology and this was reected in the way
ly inuence nancial issues in companies.
portfolios were constructed.
The thinking on duciary responsibility has
started to change with a growing recognition
Amongst more mainstream investors there
that there is not a trade off between commit-
was a dominant view that doing anything to
ment responsible investing principles and
mitigate climate change must entail a mas-
achieving the best returns. Many investors
sive interference with the market economy
are taking the view that ignoring the long
and impose large economic costs. This has
term environmental, social and governance
changed.
factors would actually be a dereliction of
responsibilities that will lead to poorer results
Markets and asset owners have been slow to
in terms of risk mitigation and return
respond but there has been very encourag-
enhancement.
ing momentum especially over the past 2
years.
While there is clear evidence of momentum
amongst international investors it’s interest-
Green bond issuance 2018 record $200bn –
ing that Irish Asset Owners have been slow to
expected to increase 20% in 20191. Green
embrace the idea of ‘responsible investing’.
bonds relatively new – provide nancing for
However we’ve seen the changes coming
projects which deliver environmental bene-
through in other markets and expect to see
ts and contribute to a more sustainable
the same here.
economy
At KBIGI we take a common sense approach
Global sustainable investments now exceed
which is applied across all our investment
30trn dollars – an increase of 34% over
strategies – we believe that over the longer
2016-20182. Over that period the increase in
term companies with strong governance and
US was 38% which is at variance with most of
whose products and services enhance soci-
the soundbites from US administration.
etal or environmental goals should meaningfully outperform.
The number of retail investment funds
embracing ESG has increased very signi-
Millenials are starting to have an inuence on
cantly over the past couple of years and this is
investment decisions, particularly in family
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