Shifting the asset management landscape
With the global focus on climate change and sustainability, the asset management industry is seeing a growing band of socially conscious investors drive a shift towards options that incorporate environmental, social, and governance (ESG) factors. This shift to sustainable investing offers asset management firms an opportunity to push asset under management (AUM) growth. Firms will need to build investment portfolios that balance the traditional goals of financial returns and long-term ESG impact.
To achieve this, firms will need to:
Navigate a rocky path to sustainable investing
Formulate a holistic strategy encompassing key business areas
Enhance capabilities in investment research, portfolio management, and risk management including climate scenario analysis
Leverage ecosystem capabilities for ESG data, engagement platforms, climate scenario analysis tools, and technology solutions
With increasing push from investors and regulators, a switch to socially responsible investing is inevitable, even if challenging.