Greenwashing, new regulation and how advisers talk to clients about investing sustainably were all up for debate in the US version of our recent Global ESG Summit, in partnership with the United National Capital Development Fund (UNCDF).
In her keynote speech, UNCDF head of partnerships, policy and communications Esther Pan Sloane explained how innovative financing in the least developed countries can help achieve the 17 international goals, which are meant to be a global roadmap for people, planet and prosperity.
The first panel looked at how advisers begin the sustainable investing conversation with clients. Victor Orozco, CSRIC, managing partner at Bair Financial Planning, said it’s a simple case of just asking. “It really is that easy,” he said. When guiding advisers on this, Jenn Kenning, CEO and co-founder at Align Impact, said start by getting to know your clients at a deeper level. “We’re the relationship adviser for a reason,” she added. Tools, such as the one presented by Yourstake.org CEO and co-founder Patrick Reed can also be useful for showing clients the impact of their investments.
Panel chair and InvestmentNews special projects editor Liz Skinner asked what advisers just starting to look at ESG should know, to which Christopher Knapp, managing director at Robertson Stephens, said to look at the history and understand how the conversation has evolved, really think about the ‘G’ and to understand the composition of the families you’re advising, which might be different from a decade ago.
The second panel was all about ESG regulation. Trysha Daskam, director and head of ESG strategy at Silver Regulatory Associates, outlined the steps the Biden administration and SEC have taken over the past few months, while Jon Hale, global head of sustainability research, Morningstar, discusses climate-related risks to businesses.
Last Word Media editorial director Dylan Emery then addressed the challenges of finding ESG-ready funds, talking through the evolution and mainstreaming of these. With more US advisers saying their clients are interested in ESG investing, most fund buyers around the world are saying what they want most is a clear definition of what ESG means to them.
Finally, the last panel dug into the issue of greenwashing. “There are three things driving this greenwashing trend,” said Sarah Bratton Hughes, head of sustainability, North America at Schroders. “End-consumer demand, the swathe of net-zero commitments, and policy that is driving capital into greener and cleaner solutions.”
Dan Ciavarella, head of sales for wealth at Refinitiv added if consumers don’t have all the information they may be acting in a way that goes against their values, which poses another risk, while Boris Khentov, SVP of operations at Betterment added if retail investors aren’t particularly sure what investing sustainably with their values mean, then it’s particularly challenging for advisers to live up to those expectations.