19 Nov Asset Management through the lens of Purpose
Today there is an ever-growing demand for more responsible investment strategies from both institutional and individual investors. In recent years the popularity of Environmental, Social and Governance (ESG) investments has risen substantially and is expected to continue doing so. Jointly with my friend Jean-Francois Hirschel, we have created the Responsible Investment Brand Index (RIBI), the first of its kind, where we analyzed all European Asset Managers ranked among the largest worldwide 400 managers with a view to validating whether good intent is also communicated at a meta-level through the brand. The index evaluates actual commitment against follow-through in brand architecture.
Distinguishing between genuine long-term commitment to sustainable investment in its larger sense and companies who just ride the hype for their own benefit is hard. The RIBI differentiates between two categories: “Commitment”, which refers to the commitment made towards responsible investment, and “Brand”, which analyses to what extent sustainable development lies at the heart of a company’s identity.
High level of commitment, low level of branding
Over three-quarters of the companies analyzed(or 184 out 239) formally commit as responsible investors. Most frequently this is achieved by signing the Principles for Responsible Investment (PRI) promoted by the United Nations. In doing so, these companies are committed to positive evolution and progress in this sphere.
Missed opportunity to differentiate and convey a clear identity
Many Asset Managers still fail to articulate why they exist when evaluated against a socially relevant Purpose. The index revealed that only 13 companies have a clearly articulated purpose, of which only three truly connect to a greater societal impact. A bit more thought in this space could propel many companies into the 21st century. It’s not just about how the sector evolves, but how people think, communicate and act.
We argue that leadership in Asset Management should make finding, articulating and communicating Purpose a strategic priority. Especially in a world that is becoming increasingly transparent and competitive and where sustainability is on everyone’s lips, a clear definition of one’s own values and vision is the key to a successful Responsible Investment branding and long-term business success.
The RIBI has been developed in order to find out which asset management companies act as responsible investors and commit to sustainable development to the extent that they put it at the very heart of who they are: i.e. their brand.
The index focuses on European headquartered Asset Managers. It compounds the analysis of all European Asset Managers (239) listed in the Investment & Pensions Europe Top 400 ranking as of December 31st, 2017.
For the full report as well as more details and background on the methodology please refer to the dedicated RIBI website here www.ri-brandindex.org