#112 Nathalie Dogniez & Julian Toth: What Is the Current State of Responsible Investment?

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Frankly Speaking - A Podcast on Responsible Business 36 min 1 speaker 3 chapters transcribed 1 month ago
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What is the current state of responsible investment compared to a decade ago?

Richard Howitt 0:02
Welcome to Frankly Speaking, the podcast on responsible business by Frank Bold, the European Public Interest Law Firm. I'm Richard Howitt and after many years leading responsible business issues and debates in the European Parliament, I lead our discussions about corporate sustainability, sustainable finance, business and human rights. Today, there's a lot being written and said about so-called ESG investment being on the retreat. But what do the leaders, the specialist responsible investors, say themselves? My guests to discuss this are Nathalie Dunni, Chair of the European Sustainable Investment Forum, URIC, and also independent director on various fund manager and administrator boards with a particular focus on ESG and sustainable investment.
Richard Howitt 0:49
investments and I'm also joined by Julian Tutt, Investment Manager at Responsible Investor Soulmates Ventures and Director at the Czech Sustainable Investment Forum. Welcome to Frankly Speaking Natalie.
Nathalie Dogniez 1:03
Thank you, Richard, for inviting me today. It's a great pleasure to be here with you.
Richard Howitt 1:08
And welcome to to Julian.
Julian Toth 1:10
Thank you very much and thanks for the invitation.
Richard Howitt 1:13
Now I mentioned all these media reports, uh and I think they are confusing because they they they speak in both directions. We get reports of specialist funds closing or being renamed, a slowdown of new funds being launched, and outflows of funds from the from the investment funds that are left. And on the other hand, you read that there are still net inflows and that responsible investors are staying the core. Natalie, which is right?
Nathalie Dogniez 1:42
Well, let's put it that way. I mean uh ten years ago sustainable investing was a niche sector and then it moved to being very hype like five years ago. Now what we see is a little bit of a return of the pendulum. And I believe that we softly lending where sustainable investing should be. I mean an important consideration, a key consideration for sh investors, medium to long term investors that want to hedge their risk, and a conviction statement for those investors that cares about sustainability.
Richard Howitt 2:21
Same question, Julian. How do you see that?
Julian Toth 2:25
I personally what I think I see in the market, not only in the region, but also globally, when you when you mentioned Richard that renaming the funds and but also seeing the inflows, I think there's some kind of communication slash marketing change as well, is what we see, especially over the last one or two years. And that's um I think mainly driven also by the geopolitics and maybe political situation and some of the political pressures in, for example, the US, especially the last year. Um back then, you do remember there was a lot of discussions about uh large asset managers, banks leaving alliances and essentially changing some of the communication strategies and how they approach and how they talk about ESG investing.
Julian Toth 3:08
And so that was what we saw in the media, but then when you actually are part of some of the closer discussions, you speak to some of the funds. they didn't really, at least that was my finding, they didn't really change the internal approach, how they assess ESG risk, how they assess climate risk in their investments. Right.

How are investors reacting to the recent ESG backlash and fund renaming?

Julian Toth 3:26
So this is something I saw also in with some funds where I used to work in the past, where to integrate, to actually go through the entire process to incorporate ESG um assessment or or for example responsible investing assessment in their processes that took many years to s to make it more sophisticated. And I think essentially to be more adapted to what was happening globally in terms of politics. I think they decided to communicate it differently, to maybe ease some of the pressures. But I think when it comes to making decisions and using data to make decisions and to manage risks, I think they continue and they use ESG data still.
Nathalie Dogniez 4:04
Totally agree with you, Julian. I mean it it is a fundamental of investment decision and this trend is not to be uh to be forgotten and will be staying forever. So it it's we have moved from something being hype to a fundamental in investment decision and risk management.

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