CITYWIRE: ESG & me: Lugano WM CEO on what to ask asset managers

PM News   •   November 25, 2019

Jacqueline Ruedin Rüsch, Privilège Management

What do you do in terms of ESG?

We do not have a fully integrated process on ESG for our mandates
yet, but we have been looking at it for the past couple of years and we
are now making a determined effort in that direction.

Today, we use several ESG-compliant funds and also invest in impact investment products. We are quite sensitive to the theme and are working on the best way to make a final push to become ESG- compliant.

How does your ESG process work?

As mentioned, we do not have a fully integrated process at the moment, but we have clear ideas and criteria in mind. We have
spoken with our clients on the subject and have become more
systematic in our selection of ESG funds. Today, we invest and
distribute several ESG funds.

Do you ask asset managers about their ESG criteria?

This is one of the first questions we usually ask when starting a discussion. We always make an effort to understand how they
approach the theme, what they look at, how the set-up is.

Usually, the ones that have full integration have a very detailed process that we can look at, while in other cases it’s just based on reports.

We also take into consideration how they approach the theme within the company itself. We look at how they manage – and how they implement – more sustainable processes.

What level of demand do you see from clients for ESG?

We noticed an increased interest and awareness from clients in
general, especially over the last few years. The theme is particularly important to the new generation.

They ask more questions and are interested in knowing how we approach the theme or how their investments are done to understand the impact they have.

So, there is definitely more interest and the trend is still up.

In our experience, most people do care about the impact their investments have on society. When you show them that you can maintain strong performances while being socially responsible,
they will not be against it.

What are your top ESG-compliant fund picks?

There are a number of companies that have ESG integrated criteria
now. Nevertheless, as our policy is to find specialised asset managers, we tend to look for managers that are less known, not necessarily the big names.

We like the COHO ESG US Large Cap Equities fund. The company is specialised in that asset class and has had a fully integrated ESG process since the beginning. A more well-known name in Europe is Exane Asset Management, which has just recently implemented a fully ESG- integrated process in their Equity Select Europe fund. These are just two examples among many others as this trend is just picking up.

Do you use third-party screens?

We do not currently have specific software. Bloomberg allows us to do some analysis.

We have been looking at some providers but haven’t made a
decision yet.

What specific challenges do you face on ESG?

The most difficult part is how to define the criteria and how to
implement a proper strategy.

There is still a lot to learn in the field and it is not sufficient to use current ratings to select the investment based on our definition.

How do you expect ESG to evolve in Switzerland?

The trend will continue until the point comes where ESG will simply become the standard.

Which steps have you taken to make your operations more sustainable?

We have implemented a sustainable policy and procedures. Things like powering down computers when not in use, lights control (by using automatic lights, for example), recycling policies, banning plastic bottles, using water from the tap, avoiding unnecessary paper printing etc.

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