By Bonnie Saynay, Global Head of Responsible Investment, Invesco & Dr. Henning Stein, Global Head of Thought Leadership Invesco
Danske Bank and Invesco go in search of authenticity in ESG Integration
There is a call for clarity in the approaches, strategies and methods used by investors and asset managers in the space of responsible and sustainable investing.
Today a large number of investors and asset managers use “ESG integration” to describe their overall approach to responsible investing but what does that really mean? We believe the term has entered common investment parlance and a sincere search for authenticity in ESG integration is now required. This paper “Lost in translation: in search of authenticity in ESG integration” calls for clarity in the approaches, strategies and methods used by investors and asset managers in the space of responsible and sustainable investing and argues how effective and material engagement should be fund-manger-driven through both dialogue and engagement.
What does ‘ESG integration’ really mean? We say that the only people who can deliver a genuine answer are the asset managers tasked with buying and selling securities.
A positive outcome is more likely when dialogue takes place between a company and its actual investor. Corporate governance should be front and centre in understanding how companies manage environmental and social risks and opportunities. After all, collaboration between investors, asset managers and academia should be promoted to develop meaningful metrics-for example, ESG ratios that relate to long-term systematic risk.
The paper is co-authored by Bonnie Saynay, Global Head of Responsible Investment at Invesco, Dr. Henning Stein, Global Head of Thought Leadership at Invesco and Ulrika Hasselgren, Head of Sustainability & Impact at Danske Bank. Ulrika Hasselgren has advised institutional investors in sustainable and responsible investment since 1999.