February 5, 2019 / Interview

Investec AM: ‘It’s time to compare managers on sustainability’

By Joe McGrath, ESG Clarity

Investec Asset Management's new fund 'won’t be the last' sustainable product it offers, director David Aird says

Investec AM: ‘It’s time to compare managers on sustainability’

Investec Asset Management is calling for fund firms to agree a set of credentials upon which investors can assess their performance on sustainability measures.

In an interview with ESG Clarity, Investec Asset Management’s UK Client Group managing director, David Aird, said it was time for the industry to establish a framework, so investors could compare fund houses on sustainability credentials more easily.

“There are a lot of different flavours in sustainability,” he said. “What we need is a framework so that advisers, pension trustees, third party ratings agencies and the very end clients have some way of judging what a fund is actually achieving.

“In the absence of any pre-prescribed framework, the investment world would do well to have some form of unified way of ensuring clients can measure the sustainability credentials of a portfolio.”

It comes after the UK’s Investment Association last month announced that it is consulting with fund firms to agree universal definitions as to what constitutes an ESG investment and an impact investment strategy.

Aird’s explicit interest in a mechanism to allow investors to compare fund firms on their sustainability record, comes after his firm launched a dedicated sustainable equity fund at the end of last year.

He says that Investec hasn’t set an asset target for the fund and would be happy to make slow, incremental gains in the size of the strategy, just as it did with its emerging market debt strategies in previous years.

“We don’t jump on bandwagons and we have a lot of patience,” he said. “Some of our investment strategies have taken ten years, or more, to mature.”

Aird says Investec Asset Management’s UK Sustainable Equity Fund was a response to investor requests for a sustainability strategy that is driven by the ESG issues that clients, not fund firms, think are important.

“There is a complete vacuum in the investment management community, when it comes to getting on the front foot and talking to asset owners, advisers, pension trustees and sovereign wealth funds. So, we started a conversation with them about what they think about sustainability.

“When we launched on December 14, there was no ticker tape [parade] down Gresham Street. It was a quiet launch.”

The Investec boss added: “It won’t be the last solution we come up with in this area.”