ESG can’t just be a de facto language, says Swiss selector
The emphasis on ESG investing and developing of asset management capabilities has to be coupled with more realistic means of measuring and promoting its use, Banque Heritage’s Jean-Christophe Rochat has said.
Speaking to Citywire Selector, Rochat, who is head of investment services at the Swiss group, said hedge fund groups have started to wake up to the need to be more ESG compliant to better meet European client demands.
However, within this great green push, the Geneva-based fund buyer raised a common complaint that the drive to join the crowd could mean companies don’t properly heed what it is they are trying to achieve.
‘What I would like to avoid is that ESG just becomes a way to communicate; it needs to have an impact. That is really the sense of ESG. There are also regulation issues and if you are Mifid II compliant you need to report that you are ESG compliant, so it is a good way to show that and you can cope with the new regulation.
‘You also need to prove you have put in place resources and understand what ESG means and what impact means and also have the proper offering to give to your clients. If you really want to build a pure ESG portfolio, that is quite difficult still, especially in the hedge fund space and the private market space.’
Rochat said the ability to prove the benefits of ESG has also proven challenging in the world of fixed income. ‘While many people are talking about green bonds, nobody is building a green bond portfolio.
‘ESG is well integrated within the equity space, but less so on the other traditional asset classes. It is the same on the alternative investment side, where we probably need to see more development and methodology to help cope with the liquidity, transparency and volatility demands.’
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