Finding the right formula for ESG investing
The case of fixed incomeMaking ESG Investing Mainstream
Environmental, social and governance (ESG) investing has taken over the world over the past few years and much has changed since a group of US churches began building the first portfolios on faith-based criteria. Whether it is a fad or a real change in the way investors, governments and consumers see the world, there is no going back. The trend here to stay.
But like everything new and unexplored, ESG continues to mean different things to different people. Approaches and data are still patchy and the question on outperformance remains. This is also the prevailing mood in Asia, where institutions are playing catch up when it comes to sustainable investing, as it emerged from a roundtable debate organised by Citywire and Robeco in the fall of 2019.
‘To really get to the mainstream in Asia, we need really strong ESG-related products in fixed income,’ announced Clifford Lee, global head of fixed income at DBS Bank.
Meanwhile, panellists agreed that offering is limited to equity products, but fixed income is playing catch up. They called for a more defined way to integrate sustainability criteria in fixed income instead of ‘forcing a big elephant though a small door’, which is not as wide as that of equities.
Others sentenced that whatever the asset class, ESG is a tool that simply adds another piece of information to the analysis of companies, as much as many other qualitative or quantitative data do.
Still, a framework to score and measure a company on ESG criteria is much needed. And when focusing on fixed income, rating agencies should also come to the fore to pick up default rates of bonds to see which ones perform better, ESG or not ESG.
Overall, some participants confessed that ESG investing has simply become ‘just investing’ and that its niche status is now part of the past. Discover more in the report.
Articles
The following four chapters outline the main issues around sustainable investing Robeco has discussed with leading private investors in the roundtable debate. They tackled the key elements on standardizing terminology, keeping up with the latest trends, the future of ESG for fixed income and how investment professionals see ESG when compared to philanthropy.
Gallery
Panellists
Kanol Pal
SENIOR ADVISOR RESPONSIBLE INVESTMENTS, BNP PARIBAS WEALTH MANAGEMENT
Kanol Pal is senior advisor on responsible investments for BNP Paribas Wealth Management Asia. He was appointed to this role in 2017 and tasked with defining the Sustainable and Responsible Investments (SRI) offer and to set up the SRI product platform across all asset classes for high net worth individuals. Pal has more than 30 years’ experience in the financial industry, having worked as bank treasury manager, head of fixed income and derivatives sales, and head of investment services in Singapore and Europe. He has a post-graduate certificate in business sustainability management from the Cambridge Institute for Sustainability Leadership.
Leslie Lim
INVESTMENT DIRECTOR, TSAO FAMILY OFFICE
Leslie Lim is an investment director at the Tsao Family Office, where he manages the fixed income portfolio. Before this, he managed Asian investments for a global credit hedge fund at Loomis Sayles. He has also spent time on both the buy and sell sides in London and New York and has 20 years’ experience in the financial markets. Lim has an MBA from Insead and an undergraduate degree in economics from UC Berkeley.
Clifford Lee
GLOBAL HEAD OF FIXED INCOME, DBS BANK
Clifford Lee is the global head of fixed income at DBS Bank. He is responsible for the build-up and continual development of the bank’s bond origination, structuring and ratings, syndicate and global distribution businesses. His product responsibilities include straight bonds, perpetual bonds, convertible bonds and structured debt securities, in all currencies. Lee also manages DBS’s fixed income team, comprising more than 70 professionals throughout Singapore, Hong Kong, China, Indonesia, India, Taiwan, Japan and London, and stands as the only Asian bond house operating across Asia in G3 and select domestic currencies.
Joyce Chee
SUSTAINABLE AND IMPACT INVESTING ADVISOR, VICE PRESIDENT, IMPACT ADVISORY AND FINANCE DEPARTMENT ASIA PACIFIC, CREDIT SUISSE
the bank’s impact advisory services as well as business development for responsible, sustainable and impact investment initiatives in Asia. Since 2014, Chee has been working in various capacities across sustainable and impact investing, as well as philanthropy. She was part of the team that launched an institutional-grade Asia impact investment private equity fund, a solution drawing the poor in Asia into commercially viable businesses in meaningful ways, with the goal to improve their livelihoods. Chee holds a bachelor of business administration degree from the National University of Singapore, majoring in finance.
Johan Jooste
MANAGING DIRECTOR, PURPLE ASSET MANAGEMENT
Johan Jooste started his career as an international economist at ABSA Bank in Johannesburg in 1994 followed by a move to the UK as the head of international fixed income at Rand Merchant Bank Asset Management. He joined Merrill Lynch’s private wealth management unit in 2008. With the merger of Julius Baer and Merrill Lynch in 2014, Jooste spent another two years as chief investment officer for Julius Baer International. He relocated to Singapore in 2016 to take up the role of chief investment officer at Bank of Singapore before joining Gary Dugan at Purple Asset Management in July 2019.
Maurice Meijers
MANAGING DIRECTOR, ROBECO FIXED INCOME INVESTMENTS
Maurice Meijers is the managing director for fixed income investments with Robeco. As client portfolio manager, Maurice is responsible for representing Robeco’s fixed income capabilities to clients in the Asia Pacific region. Maurice started his career with Robeco in 1995 as fixed income portfolio manager. During his tenure with Robeco, he has been portfolio manager of among others high yield, investment grade credits and emerging debt strategies. Prior to rejoining Robeco in 2008, Maurice worked for NIBC, a Dutch merchant bank, as head of its investment department, and for Booz Allen Hamilton. Back at Robeco, he represented key Robeco strategies in the Americas based in New York and covered the Asia Pacific region out of Hong Kong and Singapore. Maurice holds a master’s degree in economics from the University of Maastricht.
Tom Keenan
CHIEF EXECUTIVE OFFICER, ROBECO SINGAPORE
Tom Keenan is chief executive officer of Robeco Singapore and regional head of wholesale Asia ex-Japan at Robeco, where he is responsible for driving Robeco’s wholesale business and managing the relationship with intermediaries, including banks and wealth managers, insurance companies and independent financial advisors in Asia excluding Japan. Before joining Robeco in 2018, Keenan spent 10 years working for BlackRock, where most recently he was head of private bank & wealth distribution for Asia ex- Japan at BlackRock based in Singapore. Prior to that, he was head of iShares ETF specialist sales, Asia ex-Japan based in Hong Kong. Tom has over 19 years’ industry experience in the wealth management industry, and has a bachelor’s degree in business from the University of Technology in Sydney.