Asset owners are shifting towards responsible investing: KBIGI

Pedro Gonçalves
Asset owners are shifting towards responsible investing: KBIGI

Asset owners are no longer looking at responsible investing as just good PR as many now see it as priority in conducting business, according to KBIGI.

Two-thirds of all the requests for proposals KBIGI receives from large institutional investors today demand a detailed explanation of the firm’s commitment to responsible investing.

“No longer do they see a commitment to investing responsibly and sustainably as some sort of novelty, or indeed something they may consider in the future”, said Eoin Fahy, head of responsible investing at institutional asset manager KBI Global Investors.

“A majority now view a commitment to responsible investing as something they need to action diligently and as an immediate priority.”

As consultants increase pressure on pension funds and global asset managers to deploy more capital into ESG investments, KBIGI said it is witnessing a “veritable step-change” in asset owners’ adoption of responsible investing principles.

“As recently as three years ago, it was common to see no more than a single, and often token, question,” Fahy (pictured) told journalists in London.

David Hogarty, head of strategy – Global Equity Strategies at KBIGI is not surprised that the days of ‘greenwashing’ appear to be over.

“Given the benefits that come from integrating ESG information into our investment decisions it’s no surprise that it’s growing in popularity. Active management is an incredibly competitive marketplace, so anything that gives you an edge in terms of alpha generation will always be welcome,” he said.

He also highlighted how KBIGI also keeps an eye for those companies where investors can create real change: “We don’t just focus on a company’s current ESG score, which is how the company stacks up today and at a point in time. Rather we also analyse the trajectory of their score to try and highlight those companies where there is real improvement in their ESG practices. We believe strongly in the alpha opportunity of those companies with positive ESG momentum.”

Earlier this year, KBI Global Investors added a new strategy to its ethical investing business as the Dublin-based firm attempts to capture some of the vast volumes of global institutional money pouring into this space.

The new strategy focuses on the listed “sustainable” investments – meaning environmentally responsible – infrastructure space.

It is targeting companies which specialise in water and clean energy infrastructure as well as farmland, food storage and transportation, such as grain storage.

KBIGI enjoys an increasingly global client base and today holds mandates in the UK, Europe, North America and Asia. Part of the Amundi Group, the firm is headquartered in Dublin, with additional offices in Boston, Massachusetts.

The firm manages over €9.8bn assets for a broad range of clients – public and corporate pension schemes, sub-advisory investors, foundations and endowments, wealth managers, private banks and investment intermediaries included.