It has been reported that since 2012 ESG Assets held in European mutual funds has grown steadily, with the forecast that by 2025 it should reach a value between EUR 5.5 trillion and EUR 7.6 trillion, making between 41% and 57% of total mutual fund assets in Europe, up from 15.1% in end-2019* – it is believed that this will be the fastest growing area within the industry. This significant growth is being driven by regulation, outperformance of ESG funds, growing investor demand, and societal shifts.
To fully unlock the ESG opportunity, reports state that European Asset & Wealth Managers will require not only a shift in how they consider their investments, but how they will bring ESG principles to their own organisations, these actions will need to take place at organisational and product level, it includes recommendations such as:
- Define the organisational structure – to integrate all activities around sustainability/ESG into the organisation (e.g define the company’s governance structures regarding sustainability).
- Adopt a sustainable approach to human resources – Reconfigure HR policies to ensure they favour diversity & inclusion, thus addressing equality, gender & racial pay gaps, and pay and promotion transparency. This increased transparency will help build trust and collaboration across the business which in turn help managers to attract and retain talent.
- Consider EGS related risk – Develop a corporate risk strategy & regulatory framework to assess, monitor & manage sustainability risk.
- Revamp internal reporting – Develop ESG-related KPIs & include in management reports.
Managers to strategically rethink their investment approach & product strategy, pure ESG or a combined ESG & traditional products, & ensure they meet the regulations, compulsory considerations, ESG criteria assessments testing, disclosures, & reporting.
We are on the verge of a seismic shift in the investment landscape, but don’t let the ESG opportunity be held back, as the report identified that 35% of respondents in their Asset Manager survey cited lack of relevant talent/expertise as a challenge when implementing ESG products, combine this with significant organisational change, increased regulation, and reporting – you may need to review your employee resources to capitalise on this opportunity.
The Danos Group is a leading provider of permanent & interim recruitment solution, and consulting services. With over 17 years Financial Services experience and a dedicated team of Asset & Wealth Management specialists, we have the knowledge and network to be able to support your hiring & project needs to ready you for the ESG boom.
Please contact Katherine Lord or Ed Wacher to discuss your requirements or to request a copy of our Diversity & Inclusion report.
Katherine Lord | Partner & Head of Danos Consulting
Tel + 44 (0) 207 010 1153 | Email: firstname.lastname@example.org
Edward Wacher | Associate Partner, Compliance
Tel: +44 (0) 20 3889 5756 | Email: email@example.com