Earlier this October, Imagineer hosted its first MIR Forum Event on "Championing ESG in Your Investor Relations and Marketing Strategies." We were joined by hedge funds, traditional asset managers, and private equity firms representing collectively over $250 billion in assets under management. Our very own Jeremie Bacon moderated, the interactive discussion, and our panel of ESG experts included Lorraine Spradley Wilson of JUST Capital, Judy Sandford of Addison, and Drianne Benner of Appomattox Advisory.
ESG investing roughly accounts for $12 trillion of the $46 trillion in U.S. AUM as reported, by the US SIF (The Forum for Sustainable and Responsible Investment) in 2018, increasing by 38% since 2016. This investment strategy has evolved into many forms such as impact investing, socially responsible investing (SRI), and environmental, social, and governance (ESG) investing. With an increasing amount of capital invested in ESG-like strategies year over year, many asset managers have been looking for ways to champion this trend in their firm’s general value-proposition, with some managers even considering launching a new ESG-specific product.
The panel discussion focused on the evolution of ESG in the asset management industry and provided helpful insight into how firms can best approach ESG.
Here were some of my favorite takeaways from the event:
1. Is ESG driving allocation decisions?
The short answer is no.
We're in the early stages of ESG being a main factor for investor allocation decisions. Many allocators right now simply have a line on their DDQ referencing ESG and want to know your firm is at least thinking about this growing key area of interest.
2. Becoming a signatory is a nice to have but not a need to have.
SASB, SBAI, PRI, and ICCR are all organizations in which you can become a signatory demonstrating your commitment to ESG practices through and through. Of course, this takes a substantial amount of capital upfront and several years of documented commitment to their principals in order to be crowned a signatory. All of our panelists agreed that actions speak louder than words, so if you're able to demonstrate your ESG mandates to allocators, that will go a lot further than any signatory certification at this point time.
3. Best advice: start simple. Determine what ESG factors your firm has in place already and champion them!
With all the craze surrounding ESG this past year, it can be easy to become overwhelmed and too focused on the ESG practices you should implement. Before you start making an ESG wish list, take a look at what you have in place already. What ESG related policies and transparency can you provide to investors today and run with that in all of your marketing investor relations communications.
Sad you missed our MIR Forum? We're bummed too! Sign-up for alerts about future fund marketing and investor relations focused events.