Latest / Two in Twenty / AIM High: Building an ESG Business & Brand (Part 1)

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AIM High: Building an ESG Business & Brand (Part 1) · Two in Twenty

• 0:02
  SPEAKER_02: Hello and welcome to another episode of AI, the podcast for investment marketers.
• 0:08
  SPEAKER_02: My name is Twink Field.
• 0:10
  SPEAKER_02: I'm the founder of White Marble Marketing and host of these podcasts.
• 0:17
  SPEAKER_02: Today we are talking about ESG.
• 0:20
  SPEAKER_02: Now I know we've talked about it previously in the series, but we're really getting into the nitty-gritty with one of the uh industry's leaders in this space, Nordaire.
• 0:29
  SPEAKER_02: Um I'm delighted to say that Carlo Fascinotti, who's the head of advisory marketing and business management at Nordair Asset Management, is joining us, as well as Benji Alston from White Marble.
• 0:41
  SPEAKER_02: He's our product director as well as he leads our ESG practice.
• 0:46
  SPEAKER_02: Um it's really a deep dive into such a critical space really in our industry, an emerging one, or a rapidly evolving one rather, um, that uh marketers are also heavily influencing and part of in terms of um incredibly helping their business and their and their brand uh tell a story in the space.
• 1:09
  SPEAKER_02: So um we've actually got an extended session.
• 1:12
  SPEAKER_02: There's a sort of part one, part two to this.
• 1:15
  SPEAKER_02: Uh so I hope you enjoy it.
• 1:17
  SPEAKER_02: Uh do let us know what you think.
• 1:18
  SPEAKER_02: Over to them.
• 1:22
  SPEAKER_02: So thank you both, uh Carlo and Benji for joining me today.
• 1:26
  SPEAKER_02: It's great to be talking to you about such an important area that so many businesses and marketers are wrestling with, uh, some with much greater clarity than than others, frankly, in terms of how their uh companies are addressing their ESG credibility.
• 1:43
  SPEAKER_02: Um so so perhaps uh let's start this off in the conventional way of introducing yourselves and your roles, um, and and potentially also just a sort of Nordia's position on this as well, Carlo.
• 1:57
  SPEAKER_02: So why don't I come to you first and then um and then to Benji?
• 2:00
  SPEAKER_00: Well, first of all, thank you again for having me.
• 2:02
  SPEAKER_00: It's uh it's a pleasure, and I'm really excited to share a little bit of our thoughts.
• 2:07
  SPEAKER_00: Um so I'm Carlo Fascinati, I'm uh the head of advisory marketing at uh Nerdia Asset Management.
• 2:12
  SPEAKER_00: I've been here almost close to 10 years.
• 2:14
  SPEAKER_00: I'll be celebrating that in January.
• 2:16
  SPEAKER_00: So that's another important milestone.
• 2:18
  SPEAKER_00: But here today, I think I would like to discuss with you guys uh the many milestones that we've uh achieved at Nerdia Asset Management and and share, you know, sort of our best practices.
• 2:27
  SPEAKER_00: But for us, it's been strategically important uh for a very long time, ESG, and we're really happy that we're seeing both the industry and and society as well as catching up to that.
• 2:36
  SPEAKER_00: So I'm really, really uh looking forward to having uh a really interesting discussion today.
• 2:40
  SPEAKER_01: Thanks, Benji.
• 2:41
  SPEAKER_01: Thanks, Carlo.
• 2:42
  SPEAKER_01: It's great to have you with us.
• 2:43
  SPEAKER_01: Um so I'm Benji Elson, I'm the product director at White Marble Marketing.
• 2:47
  SPEAKER_01: I head up our ESG committee and sort of drive innovation and our proposition from an ESG perspective.
• 2:53
  SPEAKER_01: Um, I've been here about three years working with E Twink, and uh before that I spent some time with Newton Investments, so I was just part of their ESG team as a product specialist there, and I've also been a trustee for a climate change charity for a little while.
• 3:08
  SPEAKER_01: So hopefully have a quite a different perspective, I guess, to Carlo to bring to the conversation.
• 3:12
  SPEAKER_02: Brilliant.
• 3:13
  SPEAKER_02: Thank you guys.
• 3:14
  SPEAKER_02: Um, so a question that uh I have been burning to ask on this is why is it that the Nordic region has really led the world in ESG thinking?
• 3:25
  SPEAKER_02: Where's that come from?
• 3:26
  SPEAKER_02: And uh thank goodness for it.
• 3:29
  SPEAKER_00: Well, before I begin, full disclosure, I'm actually married uh to a Swede.
• 3:33
  SPEAKER_00: So I'd like to think myself sort of a subject matter on things Nordic.
• 3:37
  SPEAKER_00: Uh no, that's that's not true, but uh working for a Nordic company, uh, you get to know a thing or two, and uh really it's it's embedded in the society.
• 3:46
  SPEAKER_00: Um, just a couple of uh interesting statistics.
• 3:48
  SPEAKER_00: So if we look uh you know the Nordic region, let's take Norway, for example, uh 60% uh of new cars sold in in Norway uh are electric vehicles.
• 3:57
  SPEAKER_00: Um 99% of Sweden's waste is recycled.
• 4:01
  SPEAKER_00: Um 90% of uh Danish bottles, uh cans are returned uh and then reused.
• 4:07
  SPEAKER_00: Uh and then last but not least, Finland, 38% of their energy comes from renewal resources.
• 4:12
  SPEAKER_00: So you can see it's in it's embodied in the way of life and society.
• 4:16
  SPEAKER_00: And if I link it a little bit also to Nordia, um, you know, one of our first uh sector screen strategies uh was launched in 1988.
• 4:25
  SPEAKER_00: Uh this was obviously uh came from a client.
• 4:27
  SPEAKER_00: So in this case it was, I believe, the Swedish uh church, but you could see this is something that, you know, both at a on a societal level and also from an investor level has something that's been quite ingrained for for many, many years.
• 4:38
  SPEAKER_01: And a decocard, if you wanted reference, because I saw last week that you just won a big mandate with Brunel pension, biggest, biggest mandate in the UK for your climate and right?
• 4:47
  SPEAKER_00: Absolutely.
• 4:48
  SPEAKER_00: So for our UK listeners, uh we were really pleased to to see that Brunel took uh over um uh or to selected rather our climate and environment strategy.
• 4:57
  SPEAKER_00: Uh interestingly, uh that strategy we we launched it uh way back in 2008.
• 5:03
  SPEAKER_00: Uh I I believe uh Greta Thunberg, the the Swedish environmentalist, was born then, but I'm sure she she didn't know about it.
• 5:10
  SPEAKER_00: But uh all jokes aside, yeah, you know, we already were forward, I think, thinking uh with our strategies back then and we're really pleased.
• 5:16
  SPEAKER_00: And we've obviously seen a massive uh takeoff uh in in ESG uh and climate products.
• 5:22
  SPEAKER_00: And so I think this was a really great recognition, and we're seeing also uh a lot of great movement from investor interest in in the UK.
• 5:28
  SPEAKER_02: Fantastic.
• 5:29
  SPEAKER_02: Umgratulations on that.
• 5:31
  SPEAKER_02: Maybe we'll come back to sort of you know the balance between sort of product innovation and alongside client demand and sort of how they work together or sometimes can be out of step with each other.
• 5:43
  SPEAKER_02: Um, but maybe just before we get to that, um I I guess what you're saying is when the society has that kind of belief system um that a company that has its roots in that society, sort of motivating the company, organizing itself and having this type of purpose maybe comes a little easier than maybe in other parts of the world.
• 6:05
  SPEAKER_02: But perhaps you could uh Carlo just start us off talking about how you how you do align a business like this and in the way that it's thinking and investing and the kind of commitment that that that needs.
• 6:17
  SPEAKER_00: So so for maybe for some of our listeners that are maybe less familiar uh with Nordair, Nordia Asset Management, um, we're the largest financial uh institution uh in the Nordics.
• 6:27
  SPEAKER_00: Um we have a massive business uh of in the asset management side.
• 6:32
  SPEAKER_00: Uh so we I would consider us a large organization.
• 6:35
  SPEAKER_00: We'd have 35,000 employees, right?
• 6:38
  SPEAKER_00: So in order to uh, and we're 800 more or less in the asset management arm.
• 6:42
  SPEAKER_00: So in order for us to build that strategy or to, let's say, uh have that in our DNA, the ESG, you really has to come from the top to the bottom.
• 6:51
  SPEAKER_00: Uh so we have aligned ourselves with many initiatives.
• 6:55
  SPEAKER_00: So for example, many, I think most asset managers are now signed up to it.
• 6:59
  SPEAKER_00: But we back in 2007 had already uh signed the United Nations Principles of Responsible Investment.
• 7:04
  SPEAKER_00: So that's a very key framework for any organization that really wants to take seriously.
• 7:08
  SPEAKER_00: Uh so those uh principles are sort of sort of a guideline.
• 7:12
  SPEAKER_00: Uh on top of that, we have a within the asset management, we have a responsible investment committee of which the CEO of Nerd Asset Management sits.
• 7:21
  SPEAKER_00: And along with our responsible investment teams, investment uh portfolio managers, that's sort of a steering committee, and they work on engagements uh around the world.
• 7:31
  SPEAKER_00: Uh so it could be deforestation in Brazil.
• 7:33
  SPEAKER_00: So we've started to engage the Brazilian government on deforestation.
• 7:37
  SPEAKER_00: Uh so we put our our government sovereign bonds of Brazil, uh, what we call in quarantine or on hold because we were not pleased at that, the way we're doing that.
• 7:45
  SPEAKER_00: We recently, for example, uh sent out with other shareholders, sorry, other stakeholders, a letter uh to uh Asian businesses um that were building a basically coal plant in Vietnam.
• 7:56
  SPEAKER_00: Uh so these are big multinational companies in Asia that were doing that, and we weren't very say pleased with that direction.
• 8:03
  SPEAKER_00: So obviously we let that be known.
• 8:05
  SPEAKER_00: We recently also sent out another letter with other uh and institutional investors to some companies um multinationals with regards to gender diversity.
• 8:13
  SPEAKER_00: So there's a lot of, you know, so there's a lot of sort of from the top-down action uh that we do.
• 8:18
  SPEAKER_00: Now with the organization uh where I'm in, in terms of the marketing department, the sales department, product specialists, we all have a role to play.
• 8:26
  SPEAKER_00: So my team, for example, uh we are trained and also we do the training on ESG and of course all the support functions.
• 8:32
  SPEAKER_00: It's not just going out there and saying, hey, we do ESG, check out this nice little picture.
• 8:37
  SPEAKER_00: We also have reporting and data operations, which are really crucial.
• 8:41
  SPEAKER_00: Without going too much into the technical, we know that the EU uh has some upcoming regulation based on the EU sustainable action plan.
• 8:49
  SPEAKER_00: And a lot of that will require asset managers to disclose at the product level which products are or are not sustainable.
• 8:56
  SPEAKER_00: And within this reporting, uh which is extremely important for our clients, we're trying to also build easy to understand reports for our clients because ESG is quite a um how to say alphabet soup of terminologies that I think we can get easily lost.
• 9:11
  SPEAKER_02: Yeah, absolutely.
• 9:13
  SPEAKER_02: And and Benji, I wonder whether you know you could reflect more kind of broadly across the industry on this because clearly Sort of Node is leading in this regard and is um kind of immersing its business, its people in how to talk about this in a way that um is more accessible.
• 9:31
  SPEAKER_02: And we often talk, don't we, with clients that we're we're working with in this space around the kind of the storytelling, kind of bringing out kind of where they're taking action so that people can sort of see the evidence.
• 9:41
  SPEAKER_02: And it just hearing Carlo speak and having those at his fingertips really was a lesson to me around sort of how others could maybe kind of surface some of that action.
• 9:50
  SPEAKER_01: I think it shows you how powerful it can be if if you do it right.
• 9:54
  SPEAKER_01: And and businesses probably asset managers have two choices.
• 9:59
  SPEAKER_01: You can you can do the bare minimum, and you can go through the steps and you can tick the appropriate boxes that you need to do to kind of stay on the path of travel, or you can commit to this as a strategic choice.
• 10:12
  SPEAKER_01: And that requires some big decisions at a board level about how you talk about yourselves, about how you authentically demonstrate what you are doing and the commitments you've made from regulation perspectives, from your business model, from the footprint of the business, you know, all of those kind of things together.
• 10:30
  SPEAKER_01: And I think we're seeing a bit of a divergence between some clients who are who are struggling and are trying to sort of make basic steps to towards something, and others who have really got a clear direction of strategic travel where they see this journey that's unfolding and and want to really be part of it, I think.
• 10:51
  SPEAKER_02: And so much is also around that sort of being authentic to being on that journey and being able to sort of have the kind of um back the transparency point around where they are with it rather than sort of try and overreach or uh sort of be at a point where they're where they're not.
• 11:07
  SPEAKER_02: So just um give us a bit more kind of flavor on kind of where you found it most effective in terms of engaging people internally, sort of what's been in impactful, you know, externally.
• 11:21
  SPEAKER_02: Sort of just to give us a bit of your sort of top five hits in terms of uh how you've approached that, and then maybe Benji, any other perspectives you might have on it.
• 11:30
  SPEAKER_00: Absolutely.
• 11:30
  SPEAKER_00: And I think um I'm happy to say that there's actually more than five, but I won't list you the five.
• 11:35
  SPEAKER_00: So that's okay.
• 11:36
  SPEAKER_00: I want to I wanna I want to give credit where credit's due.
• 11:38
  SPEAKER_00: And I think uh I have a great team and I work with great colleagues.
• 11:40
  SPEAKER_00: So I just I don't want people to think that it's only five things, it's more complex.
• 11:44
  SPEAKER_00: But uh since have a limited time for a bug.
• 11:46
  SPEAKER_02: Exactly.
• 11:47
  SPEAKER_00: Since since you're in a top in a in a tight spot, um in fact, we're working on now a on a new presentation uh on a social empowerment fund, uh fund that's uh uh linking its strategies to the SDGs, the S of the SDGs.
• 12:01
  SPEAKER_00: And that's a really powerful story there.
• 12:03
  SPEAKER_00: You have a lot of things you can talk about.
• 12:05
  SPEAKER_00: So we're talking about vital needs, uh empowerment, uh, things like that.
• 12:09
  SPEAKER_00: And you're looking at companies that sort of are are facilitating what I like to call the dream to the SDGs, because the SDGs are a dream, right?
• 12:16
  SPEAKER_00: It's a 2030 goal uh of where we would like to as society reach.
• 12:19
  SPEAKER_00: And there's 17 of them, and you know, we've all been focused on the big E environment, and now we're we we should we should say, hey, there's a big S there too, and and I'm really excited.
• 12:28
  SPEAKER_00: So I'm and the reason why I wanted to say this is as one of my five is because we're building the story, and it's been really exciting uh because for the first time, um, I'm obviously collaborating obviously across lines with sales, with the product teams, everything like that, and everybody's excited.
• 12:42
  SPEAKER_00: So we see that we've really hit something.
• 12:43
  SPEAKER_00: So I think a thematic storytelling sells really, really well when you're trying to break uh into ESG.
• 12:50
  SPEAKER_00: Uh secondly, and I still think very uh relevant, um, maybe not a sexy word, but still really relevant, is reporting.
• 12:57
  SPEAKER_00: Now you can make reporting engaging, but you have to show your clients.
• 13:01
  SPEAKER_00: So if I invest um 100,000 pounds in a sustainable product, how is my investment going to impact things like CO2 emissions?
• 13:10
  SPEAKER_00: Um, you know, how how diverse is the board of the company that I'm investing in?
• 13:15
  SPEAKER_00: Um is this an ethical company?
• 13:16
  SPEAKER_00: Is it non-ethical?
• 13:17
  SPEAKER_00: So these are questions that clients want to ask, things that might have not been reported so easily, but we have to work towards that.
• 13:23
  SPEAKER_00: So that the reporting is a really, really uh important part.
• 13:27
  SPEAKER_00: Uh and within that scope as well, I would say uh thirdly, uh, is obviously engagements.
• 13:32
  SPEAKER_00: Um, so this is a little bit more, maybe it could be both institutional or advisory, but you have to show your clients how you're going out into the world and engaging with companies, right?
• 13:43
  SPEAKER_00: So is that a story?
• 13:44
  SPEAKER_00: I always we try to make it very clear because everybody's spam with information, but usually it is what is the company?
• 13:51
  SPEAKER_00: Uh so what is their main business?
• 13:53
  SPEAKER_00: Uh what are we engaging them on?
• 13:55
  SPEAKER_00: What's the engagement topic?
• 13:56
  SPEAKER_00: It could be uh anything from deforestation to plastics to uh labor rights issues.
• 14:02
  SPEAKER_00: What are we uh trying to get out of it?
• 14:05
  SPEAKER_00: So what is the plan?
• 14:06
  SPEAKER_00: Are we trying to have them address their supplier uh code of conduct with their distributors in different countries, et cetera, et cetera?
• 14:13
  SPEAKER_00: And then what is the outcome?
• 14:14
  SPEAKER_00: Uh have I been able to improve the company?
• 14:17
  SPEAKER_00: Has the company been able to improve?
• 14:18
  SPEAKER_00: Do I have to adjust the rating of that company, that ESG rating, right?
• 14:23
  SPEAKER_00: An ABC, right?
• 14:25
  SPEAKER_00: Did they get the good grade or did I did not get in the good grade?
• 14:27
  SPEAKER_00: Uh and I think that's really they have to show that as a as a tangible thing.
• 14:32
  SPEAKER_00: Uh fourthly, I think education is extremely important.
• 14:35
  SPEAKER_00: So, what I mean by that is creating an academy or an e-learning, similar to obviously what you guys are already providing, right, is information.
• 14:42
  SPEAKER_00: Um, I was actually looking at a very interesting uh survey, which I'll probably reference a couple of times today from uh PWC, uh, which is uh the with the growth opportunity of the century, they call it.
• 14:52
  SPEAKER_00: And in it, uh retail clients were asked, if you were able to get more education around responsible investment, would you invest more?
• 15:00
  SPEAKER_00: And the answer was I think 95% said yes, right?
• 15:04
  SPEAKER_00: So there's a need in the market to do that.
• 15:06
  SPEAKER_00: So we've we've created an e-learning for for our clients and they can go there and they learn the basics.
• 15:11
  SPEAKER_00: And I think also, again, this is a personal company decision when you do that kind of education, but I think it's important that it's a true education, that it's not just a promotion of the products and services you have, because I think in order to get into the door, in order to get that trust, you have to educate them first.
• 15:26
  SPEAKER_00: And then if you do a good enough job, they'll come uh for your products.
• 15:30
  SPEAKER_00: And I think lastly, uh and probably most important uh for me is obviously uh uh video content or digital content.
• 15:37
  SPEAKER_00: I think that's extremely important, whether you're engaging on uh LinkedIn, because I think that's in my world, that's where we engage on a professional basis, or whether there's uh platforms uh in different countries that I work with in Germany, Italy, uh, Spain, they have specific investment um uh platforms.
• 15:54
  SPEAKER_00: In fact, in the in the UK, uh we were one of the sponsors, proud sponsors of the big exchange that just launched uh live.
• 15:59
  SPEAKER_00: So that's an example of us engaging with uh a platform.
• 16:02
  SPEAKER_00: So we're really proud of that, an amazing initiative.
• 16:05
  SPEAKER_00: So these are these are just simple things uh that you can do at least to get your foot in the door.
• 16:09
  SPEAKER_00: But like I said, it's not five, it's more.
• 16:12
  SPEAKER_02: No, it's it's deeply impressive.
• 16:14
  SPEAKER_02: Um, Benji, I'm not sure what Carlos left you to sort of the scraps on that, really.
• 16:19
  SPEAKER_01: There's nothing apart from reiterating the point about storytelling, because I think one of the biggest issues is data and the subjectivity of it.
• 16:28
  SPEAKER_01: And when data is so subjective, all you are left with is the stories to build around what you do and how you do them, because otherwise you're gonna get caught in in never-ending rabbit holes of kind of arguments around terminology and data points.
• 16:44
  SPEAKER_01: Um I think what's so impressive about Nordea, at the risk of sounding like a fanboy, is that this is not something they started doing last year and have suddenly got to this point.
• 16:54
  SPEAKER_01: I I think there is there is pressure on businesses, but investors are aware that this is the journey.
• 17:01
  SPEAKER_01: They don't expect you to suddenly turn the tap on and have built all of these structures and this reputation, this credibility.
• 17:08
  SPEAKER_01: But they do want honesty at a business level and at a product level.
• 17:12
  SPEAKER_01: So it's about how you take those components and weave them into the storytelling in an authentic way, the thematic opportunity clearly clearly lends itself to that.
• 17:24
  SPEAKER_01: But but I think businesses are also struggling, a lot of businesses are struggling, because the SDGs themselves are structural aims and goals and ambitions.
• 17:35
  SPEAKER_01: They're not necessarily designed for either individuals or businesses.
• 17:38
  SPEAKER_01: So there's some real quite heavy thinking required to try and unpack some of these issues and actually make sense of them and deliver them in accordance with client objectives.
• 17:48
  SPEAKER_01: Because that's ultimately what we should do.
• 17:50
  SPEAKER_01: We should be looking at what client objectives, client horizons are, and trying to match against those in a credible way, I think.
• 17:58
  SPEAKER_02: Yeah, and so I guess that takes us neatly to the question I dodged earlier, really, around um, you know, was there ever really a danger, given your early adoption of this and passion for this as a business uh and as a um group of individuals and in it more broadly than that kind of work as well?
• 18:18
  SPEAKER_02: Um was there ever a danger of getting ahead of that client demand?
• 18:23
  SPEAKER_02: And and you know, the kind of I guess more broadly, a kind of acceptance on a commercial level that you know your clients may not be ready for these type of products yet?
• 18:35
  SPEAKER_00: So uh from the Nordea point of view, I think we didn't really have that risk as such because as any good organization, we have a diversified portfolio of different products.
• 18:44
  SPEAKER_00: So even though we were maybe setting up already uh in 2008 a climate fund, we were giving that team, for example, the time and space to develop because we believed in the strategy so we can wait patiently while at the same time still providing your normal uh typical equity, fixed income, multi-asset solutions.
• 19:00
  SPEAKER_00: But to your second point, rather, um, was there any danger uh to maybe get in there too early and then and then fail?
• 19:07
  SPEAKER_00: Well, I think that danger is gone, and I'll tell you why.
• 19:09
  SPEAKER_00: Uh and I told you I'd reference again the PWC report, but I added some really good stuff, so I recommend uh people check it out.
• 19:15
  SPEAKER_00: Uh and I quote them that that so millennials are set on the receiving end of uh to receive a record-breaking uh 41 trillion, that's trillion uh USD in intergenerational wealth transfer.
• 19:29
  SPEAKER_00: And 95% are interested in sustainable investing, according to Morgan Stanley.
• 19:34
  SPEAKER_00: So if we were in that danger, now I think you're in the danger of if you haven't set up shop now, you're a little bit late to the game and you're gonna be playing catch up and it's gonna be pretty cutthroat out there.
• 19:44
  SPEAKER_00: So uh I think we've clearly seen uh that we've arrived.
• 19:47
  SPEAKER_00: ESG has arrived.
• 19:48
  SPEAKER_00: Um, and obviously 2020 uh has been a very tough year for the whole globe uh and the pandemic has strengthened, uh let's say, or let's say made it more pronounced why ESG uh matters.
• 20:01
  SPEAKER_00: Uh so we see that.
• 20:02
  SPEAKER_00: So I think we we're here.
• 20:03
  SPEAKER_02: I mean it's interesting because I guess that's both from a client appetite perspective and relevance of what you're offering, but also in terms of attracting talent, retaining talent for kind of what millennials as uh employees are looking for in the companies that they operate in.
• 20:21
  SPEAKER_02: So uh, you know, aligning their values um, you know, personally and professionally, I think.
• 20:29
  SPEAKER_01: And that's not limited to just the pure asset managers, if you like, is it?
• 20:34
  SPEAKER_01: That's every business under the sun.
• 20:36
  SPEAKER_01: Their employees are making these demands.
• 20:38
  SPEAKER_01: Twink, you and I see this within our business, and obviously we're at a very different level, but the demands from people coming in the door to understand what our values are as a business.
• 20:48
  SPEAKER_01: Do we have a mission?
• 20:48
  SPEAKER_01: Is it genuine?
• 20:49
  SPEAKER_01: How do we treat people?
• 20:51
  SPEAKER_01: Environmental aspects, CSR, the types of questions that I don't think we asked when we were at early stages of our career.
• 20:59
  SPEAKER_01: You were just happy for a job and you got in and you did the job.
• 21:02
  SPEAKER_01: It the the dialogue has really, really changed, hasn't it?
• 21:06
  SPEAKER_02: And I guess in that regard, then is ESG as a term in and of itself quite limiting?
• 21:12
  SPEAKER_02: You know, are there frustrations, maybe Benji, just to continue on that front, uh, around understanding and scope really there?
• 21:21
  SPEAKER_01: Short answer, yes, 100%.
• 21:23
  SPEAKER_01: I I personally, and I think wider, we get a little bit frustrated with the use of the word ESG because I I think it gets so used that it it becomes the end goal.
• 21:37
  SPEAKER_01: And ESG isn't the end goal.
• 21:39
  SPEAKER_01: I think when we when we look at clients who have really kind of defined what they do well, they talk about sustainability at a corporate level and they talk about ESG at a product level.
• 21:48
  SPEAKER_01: Because ESG is simply a factor.
• 21:50
  SPEAKER_01: These are a number of factors into the investment process, and I bore everyone to tears with it being an input, not an output.
• 21:56
  SPEAKER_01: But I think that's quite important.
• 21:58
  SPEAKER_01: The more that we talk about just ESG.
• 22:00
  SPEAKER_01: ESG, the term that gets kind of lost.
• 22:02
  SPEAKER_01: So at the risk of to just to stop for a second, I think to go back to that point around client objectives and how they are aligned.
• 22:11
  SPEAKER_01: Responsible investing at the sort of core is simply the consideration of ESG factors to try and mitigate risk.
• 22:20
  SPEAKER_01: Sustainable investing beyond that is then the integration of those factors to try and capture and encourage ESG opportunities.
• 22:29
  SPEAKER_01: Impact investing is obviously a level beyond that where you're trying to create positive social or environmental impact alongside a monetary return.
• 22:37
  SPEAKER_01: And then SRI and ethical and thematic and all these other terms kind of spin off that.
• 22:41
  SPEAKER_01: But those are the kind of core building blocks that we should try and talk about more, I think, which are responsible investing, sustainable investing, impact investing, and how ESG simply feeds into those.
• 22:52
  SPEAKER_01: Because I think that lends itself to the stocks in the portfolios, the stories, and the outcomes that you're trying to create for a client that they can then understand.
• 23:02
  SPEAKER_01: And obviously that's that's perhaps more at a retail level than an institutional level.
• 23:06
  SPEAKER_01: But I think that framing will do us all a favor in trying to encourage the conversation to be more useful and more tangible.
• 23:15
  SPEAKER_02: Carla, do you have any perspectives on that?
• 23:17
  SPEAKER_00: Yeah, I think, and I'm totally in agreement.
• 23:20
  SPEAKER_00: And I think if I could add something, is that I think ESG, for a while, I think, and maybe even so true today, has become sort of a, I won't say a negative word, but people are getting fatigued uh with it.
• 23:30
  SPEAKER_00: And, you know, and and just a naming of just a few different types of strategy, SRI impact investing, uh, you know, uh sustainable thematic, whatever you have you, it can be quite confusing.
• 23:40
  SPEAKER_00: But I think that's also why uh the you know the the the EU has decided also to make uh at least us in in in in in our part of the business that you know that'll be starting to have to be disclosed products will have to be identified so it'll become more clear because right now everything is sort of lumped in and anybody kind of can put a tag on a fund uh on a product and say, hey, this is ESG.
• 24:02
  SPEAKER_00: Now we're getting sort of the the rules apply.
• 24:04
  SPEAKER_00: And I think we were alluding to that a little bit uh further back with you know the data issue, with with not being able to compare things, there's there's no common framework.
• 24:12
  SPEAKER_00: And we were actually discussing it the the other day, and it's a little bit like when the accounting standards first came out, uh it was like the wild, wild west.
• 24:19
  SPEAKER_00: Everybody did what they wanted, but like once they were implemented, everything became very clear.
• 24:22
  SPEAKER_00: And I think that's where we're moving uh towards as a as an industry, towards this and make it clear.
• 24:26
  SPEAKER_00: And I think it'd be really important.
• 24:28
  SPEAKER_00: But ESG as such today, I think um, because everybody has now seen the potential, everybody's jumped on board, it's become a little bit of a crowded space.
• 24:36
  SPEAKER_00: So I think now it's good that we're cleaning it up a little bit and it's it's a fair playing field for whoever wants to provide those products, but it needs to be made more simple.
• 24:45
  SPEAKER_02: And maybe we'll get more into that um a little later in the discussion as well.
• 24:49
  SPEAKER_02: Um but I wonder whether is you know, you're talking about SDGs earlier, um and and obviously you're starting to talk to them, the kind of the kind of Paris climate agreement.
• 25:02
  SPEAKER_02: Are you talking about that more with clients now then as opposed to sort of evolving those kind of conversations that you're having?
• 25:08
  SPEAKER_02: And is that because it's more relatable and or kind of how you know how is that sort of evolving in terms of your client dialogue?
• 25:15
  SPEAKER_00: Well, if I may, uh when when I you know learned about the SDGs, I mean remember, the SDGs are quite new, where it's not been here for you know 20 years.
• 25:22
  SPEAKER_00: We're talking about five years ago.
• 25:23
  SPEAKER_00: They actually just celebrated their five-year anniversary uh recently.
• 25:27
  SPEAKER_00: Um, you know, you'd used to see you know a lot of the UN guys or ladies when they walked around, they had the little pin uh with the little you know flags, and people like, what is this, a rainbow or whatever?
• 25:36
  SPEAKER_00: It got very confusing, right?
• 25:37
  SPEAKER_00: So people were really not associating it.
• 25:38
  SPEAKER_00: So climate clients had heard of it, the jargon, if you will.
• 25:41
  SPEAKER_00: Uh they knew obviously of the climate, uh, client uh Paris Climate Agreement, because uh I think in that instance, Donald Trump also made a helpful uh uh contribution there by leaving it and promoting it.
• 25:52
  SPEAKER_00: So for those that didn't know, it became a shock to the world.
• 25:54
  SPEAKER_00: So I think today investors and clients know more about or they're aware what it is the Paris Climate Agreement, they're aware that these SDGs exist, but I still think we're not quite yet there.
• 26:07
  SPEAKER_00: And that's again, let's say, a challenge for our side of the business to educate them.
• 26:12
  SPEAKER_00: But I do see more and more, let's say, investors that are real, let's say, that have real interest, both on the retail and institutional side, institutional side, they're pretty much covered, but even on the retail side saying, hey, how does this product or the the companies you have in this product align with the SDGs or how are they contributing to the SDGs?
• 26:31
  SPEAKER_00: And even if I may to go one step further, more and more companies are putting as part of their corporate strategy, so even a core financial corporate strategies, SDGs in it.
• 26:40
  SPEAKER_00: So it's becoming sort of a um incorporated language.
• 26:44
  SPEAKER_00: And so as that becomes absorbed, then yeah, people will be able to uh it will just become common language.
• 26:50
  SPEAKER_00: Uh is my my view on that.
• 26:52
  SPEAKER_01: And I would say, um, Trink, that there are tools out there to try and help make the SDGs more relatable.
• 27:01
  SPEAKER_01: Because they can be so big picture, so long term, that they risk alienating, particularly smaller businesses, from understanding how they can help contribute towards those.
• 27:12
  SPEAKER_01: So that there are kind of sources and solutions out there that can help in that regard.
• 27:17
  SPEAKER_02: Absolutely.
• 27:19
  SPEAKER_02: And I'm conscious that uh time is ticking away, and we're gonna have to take a pause at some point to get to part two.
• 27:26
  SPEAKER_02: But before we um we do that, can I previously you talked so eloquently around the kind of complexity around this?
• 27:33
  SPEAKER_02: Even I think you used the example of sort of fossil fuels and it not being this sort of very binary kind of picture.
• 27:40
  SPEAKER_02: So I wondered as a uh as a sort of final part of the conversation for this part one, maybe if you could just sort of talk a bit to that and and how you know any pointers you have for marketers, I guess, dealing with this ambiguity, frankly.
• 27:58
  SPEAKER_00: So I think fossil fuel is definitely a terminology uh that's out there.
• 28:03
  SPEAKER_00: Uh a lot of people uh are more aware of it, particularly because we have uh sort of a carbon footprint, is a big word used around you know, the impact of companies on obviously our our environment.
• 28:14
  SPEAKER_00: Uh, then it gets a little bit tricky and you start talking about you know scope one, scope two, scope three, and and I won't go into that today because I think then we'll we'll lose our our our avid listeners.
• 28:23
  SPEAKER_00: So my my my point more for that is that we at Nurdea have now um come out with our fossil fuel policy.
• 28:30
  SPEAKER_00: So it's really aligned ourselves where we we take it upon ourselves to only invest in companies that are on that transition pathway to clean energy.
• 28:39
  SPEAKER_00: And that's really a personal decision from us uh in order to say, hey, um we we are not gonna be strict in the sense that if we find a company that might take a little bit longer to get there, we say we're not gonna work with you, but we have to make sure that there's a path, a clear path, that they will reach the the climate, uh the Paris Climate Accord of the two degree uh target.
• 28:59
  SPEAKER_00: So we evaluate and start integrating that into our portfolio.
• 29:02
  SPEAKER_00: So how how why does that matter to me in marketing?
• 29:04
  SPEAKER_00: Because it's a powerful story.
• 29:06
  SPEAKER_00: People want to know, I as a as a consumer want to make sure that if I am really uh uh um want to be socially responsible, believe in ESG or responsible investment, I want to know that the companies that I'm investing to uh are actually going towards this greener and cleaner transition.
• 29:23
  SPEAKER_00: So for us, fossil fuel is is one of the many stepping stones.
• 29:26
  SPEAKER_00: It's the first industry, it's the easiest one.
• 29:28
  SPEAKER_00: Uh maybe we less so pronounced in these times because of COVID.
• 29:33
  SPEAKER_00: So we're not driving as much, we're not flying as much.
• 29:35
  SPEAKER_00: But you know, I I've uh had the fortune to live all around the world.
• 29:39
  SPEAKER_00: I lived in Madrid, Spain for many years.
• 29:41
  SPEAKER_00: There, they had days when the pollution got so intense because it rained so little that you had to have even or odd number plates picked which days they could drive, the speed limits were reduced, uh, they had more areas, which was great that were uh off limits to cars.
• 29:56
  SPEAKER_00: So this is something that resonates to clients, to final clients.
• 30:00
  SPEAKER_00: So having a concrete example in a fossil fuel policy is a nice way to show uh our commitment to that.
• 30:06
  SPEAKER_00: So that's we're really developing in that.
• 30:08
  SPEAKER_00: I think we're at the first stage, but stay tuned because I think the fossil fuel, then we'll start moving into different industries because now we're just focusing on the climate.
• 30:15
  SPEAKER_00: But as Benji was saying, and we were already discussing, you know, the SDGs out there have many other uh issues and problems that we can tackle, and I'm sure we will work towards those in the future.
• 30:24
  SPEAKER_00: So I think as a marketeer, you got to be aware of where those challenges are gonna come from because you can make some amazing infographics, you can make amazing videos and stories around them, and they're just there for the picking.
• 30:34
  SPEAKER_00: So it just takes a little bit of uh alignment and focus, but uh it's easy to be successful there.
• 30:40
  SPEAKER_02: Fantastic.
• 30:41
  SPEAKER_02: I'm gonna suggest that we just pause for a second.
• 30:44
  SPEAKER_02: I think it's been such an interesting uh discussion so far, particularly uh kind of how you're leading the way in terms of being an employer, being uh a sort of a business and an investor in the space.
• 30:55
  SPEAKER_02: I think um I look forward to to pick up the conversation um in a few minutes.