Drive positive change with ESG (part 3)
Value-oriented, long-term and sustainable investing is the trend today. Also at Vontobel – but for almost 30 years already. The recent abbreviation “ESG” refers to the use of Environmental, Social and corporate Governance factors to assess companies or countries in terms of their contribution to sustainability.
Up till now, such investment opportunities were in demand mainly from professional and institutional investors. Yet many private investors also consider sustainable investment a convincing approach. What's stopping them from implementing these ideas? In our 3-part series based on a detailed ESG study by Vontobel, learn how the inclusion of ESG criteria can provide investors with solid arguments to support their investment decisions, and even reduce risks and create new return opportunities.
Did you know that intermediaries who address ESG issues often find themselves preaching to the converted? Learn in Part 3 of our series what has motivated ESG investors and where their priorities lie.
How can more savers and investors be convinced to use an ESG approach for the first time, or to increase their ESG allocations? First, providers of financial products and intermediaries must address the issue of ESG with their clients more frequently and deliberately, believes Thomas Trsan, Specialist for ESG and Impact Investing at Vontobel Wealth Management. "These conversations are opening the eyes of many clients," he says. "Clients have simply not had all the possibilities and different approaches explained to them."
Philipp Achenbach, an ESG specialist at the German investment consultancy TauRes, agrees, saying: "You can introduce people to the topic in many different ways. For example, we put on many small workshops where we can talk about ESG investing to 10 to 30 people directly. This is one of the best ways to reach new clients, because you have more personal contact right from the beginning. And new communication channels can also help to reach a wider audience," he adds. He produces a regular podcast on socially responsible investments that clients can download and listen to.
One important strategy for intermediaries and others who talk about the benefits of ESG is to understand the motivation of clients who have already invested using this approach. These motivations turn out to be very similar for investors in different age groups and asset classes. In all categories, though, ESG investors are convinced that they can profit from doing good, and that they can achieve the performance they desire while still remaining true to their principles.
Promoting the good rather than avoiding the bad
When asked to specify their ESG goals, many investors actually represent a more proactive point of view. The three most important priorities for ESG investors are positive steps towards renewable energies, environmentally friendly companies or projects, and sustainable enterprises. Intermediaries could learn from this that it is important to highlight how an ESG approach can actively promote certain concerns or priorities, rather than stressing how inappropriate companies can be avoided.
Much work remains to be done to help savers and investors feel better when they act on their undisputed ambitions, and orient their savings and investments in line with the values that are dear to their heart.
Order our ESG study
Would you like to find out more about ESG and obtain a condensed overview of our study on what investors are thinking about the topic of sustainable investing?