Many asset managers claim to do ESG integration. But do they really? It can be a tough call, as the marketing is often stronger than the execution; scores and ratings tell only part of the story; and the confusion over concepts makes it even harder. Here are four questions that can help you get behind the façade.
What’s the conviction behind a fund’s ESG integration? In the absence of a direct answer, try to get a sense of whether it is aimed at better decision making, better risk assessment, better insight into what they own, taking responsibility, or simply pleasing customers. Of course, a poor answer is telling, but also treat a strong answer with extreme caution: it’s easy to spin a good story about lofty ambitions. It’s harder to put them into practice. So dive deeper. What do they really do? How do they do it?
Most asset managers will have a ready-made answer. But again, the key is to go deeper. At the fund level, typical follow-up questions are:
Taking it to the group level, you might ask:
This question is typically answered by referring to the portfolio’s average sustainability scores and sector exposures. But that’s too easy. First of all, scores do not provide the complete picture. Second, it doesn’t mean that decision making is affected in all stages of the investment process. You should therefore ask questions like:
In my experience, the killer questions in distinguishing the really advanced players from the mere marketing facades are the ones that dig into the asset manager’s experience, such as:
And no, don’t believe them if they say they did not have any problems.
Please read this important information before proceeding further. It contains legal and regulatory notices relevant to the information contained on this website.
The information contained in the Website is NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency.
In the UK, Robeco Institutional Asset Management B.V. (“ROBECO”) only markets its funds to institutional clients and professional investors. Private investors seeking information about ROBECO should visit our corporate website www.robeco.com or contact their financial adviser. ROBECO will not be liable for any damages or losses suffered by private investors accessing these areas.
In the UK, ROBECO Funds has marketing approval for the funds listed on this website, all of which are UCITS funds. ROBECO is authorized by the AFM and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.
Many of the protections provided by the United Kingdom regulatory framework may not apply to investments in ROBECO Funds, including access to the Financial Services Compensation Scheme and the Financial Ombudsman Service. No representation, warranty or undertaking is given as to the accuracy or completeness of the information on this website.
If you are not an institutional client or professional investor you should therefore not proceed. By proceeding please note that we will be treating you as a professional client for regulatory purposes and you agree to be bound by our terms and conditions.