1. Newsroom
  2. Asset TV Fund Selector: ESG & Impact Investing
Menu
UBP in the press 07.11.2018

Asset TV Fund Selector: ESG & Impact Investing

Asset TV Fund Selector: ESG & Impact Investing

Once considered a niche investment activity, sustainable investing is increasingly moving into the mainstream across all asset classes.


 

Approaches that integrate environmental, social and governance (ESG) criteria, along with strategies like impact investing, are attracting growing interest from those institutional and private investors who are willing to align their investment decisions with their values. The potential is huge, but there are challenges, such as data collection and capacity. Victoria Leggett, Head of Responsible Investment at UBP, recently took part in an Asset TV broadcast outlining the crucial trends on the market and development opportunities when it comes to ESG and impact investing products.

Sustainable investment has witnessed a sea change in recent years, with the asset management industry progressively moving from an exclusion perspective towards a much more positive approach, stated Victoria Leggett during a recent Asset TV broadcast about ESG and impact investing. Along with other industry experts, she added that there is now well-documented evidence that targeting positive social and environmental outcomes can generate competitive financial returns.

At UBP, sustainability is at the heart of investment decisions and not in a “siloed” way

explains UBP’s Head of Responsible Investment, admitting that there are still different interpretations in the financial community of what sustainable investments should be.

The concept of impact investing, however, can be easily explained: the impact universe is an umbrella for all different types of asset. Although listed equities are relatively new to impact investing, the inclusion of these liquid assets will play an essential role in the strategy’s development, as it makes it much more accessible to investors, Leggett continues.

A company has to meet key criteria in order to be considered a potential candidate for an impact fund. Its “intentionality” has to be thoroughly tested in the first instance, meaning that making a positive and a purposeful impact must be part of its business model. “Additionality” is another key characteristic, insists Victoria: firms likely to stand out as “impact companies” have strong innovation patterns and their processes tend to be unique in their fields. Last, “materiality” also has to be demonstrated. As available data is scarce and often barely comparable between one company and another, relevant KPIs have to be worked through. This can only be done over time and involves strong engagement with a company’s management at every stage of the investment process.

In conclusion, Victoria Leggett notes that the risk of style bias that would accidentally make the impact fund look like a renewable energy or healthcare fund, can be mitigated through diversification across sectors.

Impact investing

victoria-leggett-150x150.jpg

Victoria Leggett
Head of Responsible Investment for Asset Management

Expertise

Hedge funds

UBP is one of the longest-standing investors in hedge funds and a leading European player in the sector.


Further reading

UBP in the press 06.03.2023

An eventful start to the year for equity markets

Bilan (22.02.2023) - After 2022 brought an 18% fall in the MSCI AC World index, global markets began 2023 with a rally spanning various asset classes.

UBP in the press 03.03.2023

Higher volatility sparks hedge fund comeback

Bilan - Pierre Novello (27.02.2023) - In 2022, after a lost decade, hedge funds once again saw the turbulent conditions that suit them so well.

UBP in the press 22.02.2023

UBP CEO: The skills private bankers need to survive in 2023

Asian Private Banker (17.02.2023) - Decades ago, private bankers could survive with a limited investment skill set and a good network, but today they have to master several layers of expertise on top of relationship management skills, Guy de Picciotto has observed.