The mainstreaming of Environmental, Social and Governance (ESG) issues in investment management continues apace. The number of resolutions at AGMs on climate change has doubled in three years, challenging Big Oil to hasten its transition to renewable energy.
Asset owners, notably pension funds, face ever more regulatory requirements to enunciate their policy on climate change. And since the publication of Thomas Piketty’s Capital and the MeToo movement, asset managers are incorporating social and gender equality into their strategies as major themes for our age.
One such case is Lombard Odier Investment Management (LOIM), the asset manager for Swiss private bank, Lombard Odier. In 2016, just SFr4bn of LOIM’s assets under management were run on an ESG basis. Today 80% of all long-only strategies at the SFr65bn firm incorporate an ESG framework, according to Robert de Guigné, head of sustainability at LOIM.
“It’s been a long path but we have a common philosophy across the entire bank. This has to come from the partners, the owners,” he said. With a common philosophy agreed, Lombard Odier has constructed its own, three-pillar scoring methodology, which is part of all portfolios.