A recent study conducted by Deloitte shows that French investors are increasingly interested in responsible investment but still have difficulty materialising it in their portfolios. Among the reasons given were a lack of clarity in the asset class and, above all, a difficulty in measuring its concrete effects. Yet tomorrow’s change is certainly in their hands.
It is a fact that daily information confronts us every day with environmental and social issues: global warming, resource and waste management, respect for gender equality, well-being at work, etc. For a long time, financial analysts have taken little or no account of these issues in their management process, but it must be acknowledged that they can have a significant impact on the present and future value of companies when they have not taken into account environmental and social risks (risk of poor image affecting the share price, for example), or on the contrary potentially increase their value when they have seized opportunities (energy management improving margins, better productivity, etc.).
These topics are all the more important to the new generation who want to act to change things and give meaning to everything they do. This generation is none other than the saver of tomorrow.
Impact” investment, i.e. investment in securities (shares, debt) by seeking to assess their concrete and measurable effects on the environment or society, and “shareholder engagement” have so far been considered as the ultimate and most successful versions of responsible investment. These “strategies” are gradually becoming a “must-have” for investors who want to invest in line with their own values and to be able to evaluate how each euro invested has made a difference.
More than ever, well integrated into a diversified portfolio, they also make it possible to invest in “mega-trends” (resource and biodiversity management, urbanization, access to education and health, but also digitalization of the economy, need for security), investment themes with a horizon of 10-20-30 years that allow us to look beyond simple tactical management with 3 months or strategic management with 1 year. And thus avoid the nervousness of the markets, the problems of central bank rate management and other burning issues causing the volatility levels recently known in the 4th quarter of 2018.
Responsible finance can become a catalyst for political action, at a time when voters are demanding more than ever from their representatives concrete actions to address key issues. Private banking, and banking in general, is an important mechanism for transforming intentions into action. Through the products and services they offer, they will make it possible, as a link between management companies and investors, to put pressure on companies to ensure that each investment is in line with one or more of the UN’s Sustainable Development Goals, these 17 major challenges that the world will have to face in the coming decades. Savers, more than ever, the power is in your hands!