Bernard Sabrier: it’s an ‘illusion’ to say doing good makes more money


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Looking at the employer’s performance during the Covid-19 pandemic, I think the most interesting story comes from the FT Live Events division.

Its established business of gathering people for face-to-face discussions was overwhelmed almost overnight — in fact, for some time it was actually illegal in many countries. And while video conferencing technology has been around for years, I never thought it would provide a platform to inspire conferencing.

I found out I was wrong. I just attended the first Moral Money Digital Summit yesterday. This is part of FTLive’s very popular and successful pivot for virtual events. Even as face-to-face meetings begin to revive, it’s clear that these digital versions have an exciting future. This allows people to see and participate in compelling discussions over long distances (with relatively small carbon dioxide emissions). This looks like a valuable new channel for truly global debate, as it seeks a path to a fairer and more sustainable world economy.

I really enjoyed talking with various speakers from the chair of the McKinsey Global Institute. James Maniika Former US Trade Representative Michael froman.. As you may have noticed if you attended my session, I quized some of the participants, thinking about what I’ve been thinking about lately. What financial, regulatory, and legal changes do corporate leaders need to move in the right direction, even with a new focus on environmental and social impacts? And what do we do about concerns that seem to be becoming more and more common, and that emphasis on corporate behavior distracts governments and lawmakers from the need to revamp their economic rulebooks? Should it be?

I would like to hear the answers of moral money readers to these important questions.Send your ideas and insights to, Or interact with us on Twitter @ftmoralmoney.. — Simon Mandy

Moral Money Q & A: Bernard Sabrier

Few business owners in the asset management industry have the exact same perspective. Bernard Sabrier.. The chairman of Unigestion, a $ 22.1 billion asset investment company that took control of his father in the 1970s, has worked in the financial industry for 50 years. He was an early pioneer in investing in hedge funds in the 1980s and became acquainted with industry legends such as George Soros and Paul Tudor Jones.

However, the 68-year-old is also one of the largest philanthropists in the European fund management industry. In 2011, Sabrie founded the Famsa Foundation, donating a majority of 45% ownership and 55% voting rights to Unigestion to the project.

Moral money Lawrence Fletcher To address the expectations and concerns that the fund management industry will enter into environmental, social and governance (ESG) investments, and whether investors can make more money by doing good. , Talked to Sabrie.

MM: What do you think of the asset management industry’s approach to ESG investment?

Eiffel Tower illuminated by the message “Paris Agreement Completed” on November 4, 2016 to celebrate the first day of application of the Climate Change Agreement © AFP / Getty Images

BS: Sustainability has brought the entire industry to the forefront quite quickly after the 2015 Paris Agreement.

My question — and I’m still struggling with this — can ESG compliance make more money? I don’t know if that is true.

Time tells us how much value an investor will give to all these qualitative points. Maybe we’ll have a day when your balance sheet becomes completely meaningless. People will invest in you not for your benefit, not for your sales, but for the way you treat your employees about the impact you have on society, climate and nature.Maybe you make zero profit and they will pay you a billion [dollars].. If that happens, it’s a chance.

MM: It’s an important idea that has been promoted by asset managers. In other words, you can make more money by doing good. Do you think that is correct, or does the performance of ESG funds depend on the flow of investors?

BS: It’s all new, it’s all exciting, it’s all good. So you have recipes for huge streams, huge momentum, and potentially some catastrophes along the way. It’s not a catastrophe, but perhaps some people say they don’t do it and others believe it won’t happen.

For me as an investor, you need to draw a strong line between profits. What I am worried about is that the combination of good things and potential benefits can break the ethical frontier.

You must have a clear line between what philanthropy is and what investment is.And i think i mix [philanthropy and investment] It’s a complicated exercise. I think you should make money to do philanthropy and social projects. But I think it’s an illusion to tell people. If you do good, you can make more money.

Q: I have seen it With Tariq Fancy There are now more questions about ESG as a concept that people don’t really know about.

BS: Borders are not yet fully defined.With investment [ESG] It can lead to potential ethical issues. Perhaps five years later, there will be pensions, funds and sovereign wealth funds that say they have “dedicated part of their portfolio to influence.” Does that mean an impact on our performance or an impact on the world? I think some people may sacrifice performance to become a better citizen or a more influential investor. Others may say “no” no matter what I do, I want to make more money. In Europe, an increasing number of clients are convinced that they should move to ESG. You go to America, and people don’t care or care less.

“Clearing”: Soaring carbon prices threaten corporate profits

Workers monitor molten metal at a Danish steel factory

Soaring carbon prices pose a significant threat to certain business units such as heavy construction, utilities and metal production © AP

Europe’s energy shortage, coupled with the outlook for stricter environmental regulations, is pushing continental carbon prices to new heights. EU carbon prices Soar to new highs In August, there are no signs of a fall. The UK’s emissions trading system’s carbon price, which debuted in May, hit a record high in September.

With record prices for these carbon allowances, companies are now looking for ways to swallow costs. For example, Pittsburgh-based US Steel said in July that it would need to purchase an additional EU allowance of € 67 million from the € 38 million spent by the end of 2020.

In Cap and Trade Skime, companies need to buy carbon emission credits, so large polluted energy companies need to buy credits to cover their emissions. Other companies that can afford the emissions can sell their credits to the market.

Soaring carbon prices pose a significant threat to certain businesses, according to Osmosis Investment, a $ 2 billion London-based company. The company said in a recent report that the net profits of the oil and gas industry could be “cleaned up.” Heavy construction, utilities and metal production businesses are also at risk of net loss.

Companies can adapt, Osmosis said. “But the need for action has become more urgent, the changes needed have become more extreme, [company’s] The starting position is “. Orsted, a Dutch energy company that has transformed into a leader in renewable energy, is one example of a best-in-class company that has made a successful transition, Osmosis said.

With the proliferation of emissions trading systems (ETS) around the world, there is increasing pressure to adapt.Washington In 2023 It will be the 13th US state with a carbon pricing program.apart from Some initial limitsThis year, China launched an emissions trading system in the world’s largest carbon market.

These market-based approaches to climate change may do more to set global prices for carbon than top-down government regulation. We will monitor additional ETS discussions at COP26 next month. (((Patrick Temple-West).

Today’s chart

Chart showing ESG fund flow

After a good start this year, ESG fund flows continued to lose momentum in the third quarter of 2021, according to a report by the Institute of International Finance. Inflows into ESG fixed income funds in the third quarter were slightly stronger than in the second quarter, but below the first quarter aggregates.

Smart read

  • Former Rear Admiral Mike Hewitt is pitching investors to a rare green venture, nuclear power, especially “modular reactors.” It is expected to combine government funding with investors focused on ESG mandates. “Traditional ESG standards have hampered nuclear power generation. [of their funds]”Hewitt said. “But I think this is changing.” Check out Gillian Tett’s latest report How nuclear power can help fill the gap in the transition from fossil fuels.

  • BlackRock allows institutional investors to vote on equity index fund stocks. This gives clients more say, from executive compensation to environmental disclosure. The BlackRock decision will begin next year and is the first step for major asset managers to give the final owners of a company’s vote the right to use them.Read a colleague’s FT story here..

  • This week, the Global Reporting Initiative announced new disclosure standards to integrate human rights reporting expectations. The goal is to deploy companies for new regulations from IFRS and the European Commission. “What we have now is [sustainability] report. Not only performance metrics, but the big picture of the operational process is important. ” Eric Hespenhide, Chairman of the GRI Board of Directors, Told Forbes..

Recommended reading

  • Foundations, private equity firms create ESG reporting platforms (WSJ).

  • Hedge funds earn cash when green investors dump energy stocks (FT).

  • Can African countries prosper by being environmentally friendly? (((FT).

  • The Fed’s Brainard states that banks are likely to require regulatory instructions regarding climate risk management ()WSJ).

  • DWS launches a new greenwashing review in the heat of regulation (FundFire).

  • Shops want more ESG data from public companies: ISS (Ignite).

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