How will ESG impact the funds industry? It’s a question IQ-EQ asked recently in a sustainable luxury hotel in Amsterdam.
The event at the QO Hotel on July 3 was filled to capacity. Following an introduction from Luc Hollman, managing director of IQ-EQ Netherlands, guests were treated to an excellent overview from Maaike van der Schoot, responsible investment officer at AlpInvest Partners. After questions from the audience, it was then time for the main panel discussion.
Chaired by Funds Europe publisher Alan Chalmers, this posed the question: “How will ESG impact the funds industry?” Ready to answer were leading industry figures Floris Leuftink, investment director, Klimaatfonds Nederland; Jurjen Algra, commercial director, Meewind; Remco Bleijs, associate partner, EY; and Serge Krancenblum, IQ-EQ’s group executive chairman.
At first the discussion revolved around defining what was meant by ESG, no mean task in itself. This was followed by a review of the weighting of the environmental, social and governance components and what the major priorities were. As expected, the answer boiled down to “well, that depends”, but the debate presented a valuable opportunity to talk about the components individually.
The next area to come under scrutiny was regulation and standards – always a difficult issue, and a hot topic for regulators at the moment. Those in the EU particularly are likely to opine in 2020, setting out clearer standards for the industry. Bleijs, whose remit at EY includes sustainability services, gave his insights into the regulations likely to come our way.
Next, the discussion focused on the environmental aspect of ESG, covering impact investing, sustainable investment, green energy and – in a venue that boasts sustainability as one of its main selling points – green property.
Green energy is a particularly important part of the Dutch market, adding weight to the insights of Leuftink and Algra – Klimaatfonds is a leading investment platform for solar energy, while Meewind is a prominent wind energy investor. However, despite consumers and retailers showing great interest in the sector, it remains the domain of institutional investors.
The panel also looked at impact investing and how to define it – another area that provoked strong views from the audience.
Turning to the ‘G’ in ESG, Krancenblum outlined the changing nature of governance within both companies and funds. He made the point that all companies, including IQ-EQ, need to set out their own mission statement and ESG credentials.
Questions about governance and skills were hotly debated by the audience, including ESG skills and gender. In the latter case, a query about whether gender diversity should be regulated split the audience 50/50.
When social investment was raised, the panel reached the view that it should not be an investment area, but that issues such as human rights, health and safety should be enshrined in everything we do.
The discussion concluded by examining ESG in the Netherlands and the future of ESG, which looks like going in one direction only. The consensus was that it will become mandatory for all investors in the future.
A hallmark of the debate was full audience participation, with strong views leading to heated (but very informed) discussions. Indeed, the level of expertise shown by the audience matched that of the panel.
Attendance was high and the debate went on for more than 90 minutes, reflecting intense interest and knowledge among attendees.
All in all, the event was a great success and very uplifting.
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