BMO’s Jamie Jenkins, Co-Head of Global Equities, on why today’s ‘land grab’ in responsible investment is highlighting the need for authenticity and teamwork
What are the key trends emerging in the post-pandemic environment?
People are now on board with the idea - long central to our approach - that it is possible to deliver a compelling investment return while also being aware of the non-financial impacts.
But there's also a land grab going on in terms of firms repositioning themselves as responsible investors. Europe - in many ways the global centre of responsible investing - is using new legislation to guard against greenwashing and to push back on the tidal wave of traditional assets recloaking themselves as responsible.
Where do you see yourselves in that ‘battle for authenticity'?
At BMO, we've been investing responsibly for over 35 years, so we have heritage and credibility. Our clients know where we've come from and where we're trying to go to. I think a trio of characteristics sets the market leaders apart from the fast followers: heritage, authenticity of approach and innovation.
Innovation is important because responsible investment is perennially being redefined, for example, in terms of the most important themes. We are redefining it ourselves and we also need to respond to, and sometimes ride out, the industry trends as well.
Could ESG integration turn out to be a fad?
I suspect by the end of the decade, a lot of the new labels on products will have dropped away.
But ESG integration is here to stay. There is an inherent logic for integrating these issues thoughtfully into all fundamental analysis, whatever your asset. We believe ESG integration offers a deeper, more granular analysis of the risk and opportunities that confront every company.
Is your assessment of a company's ESG standing driven largely by ESG data or human judgment?
ESG data has improved vastly over the last 5-10 years but it still needs a lot of interrogation and interpretation. So, the backbone of our proposition in the responsible investing space - and I think this is the aspect that really differentiates us - is our investment teams' partnership with our over-20 strong team of responsible investing experts.
In the investment team, we consider ourselves to be specialist global ESG managers with a solid appreciation of what's going to be acceptable or unacceptable in our world. But we also draw on the Responsible Investment team's expertise throughout the investment process, from idea generation to engagement strategy, and work with them closely on a day-to-day basis. One of the unintended consequences of working remotely and video calling over the last year is that it's made dropping into each other's meetings culturally acceptable in a way that I think will really help us going forward.
Click here to read Jamie Jenkins' views on the long-term sustainability megatrends now driving the world economy - and for more on how he works with BMO's Responsible Investment team
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