ESG Investing  

Data a 'serious problem' in ESG investing, says manager

Data a 'serious problem' in ESG investing, says manager

Data is a “serious problem” within ESG investing according to Redington's responsible investment lead.

Edwin Whitehead told FTAdviser a lack of insight on the climate impact of portfolios was inhibiting people from investing in the products. 

He said: “Data is [within ESG investing] a serious problem - not being able to have consistent, reliable, accurate and timely data on your emissions or climate impacts of your portfolio at a total asset owner level. 

“You should be looking to use the best data available, but where you can't get it, you're probably gonna have to do some estimating. There is [therefore] ultimately a hesitancy to do anything differently.”

He added it was understandable that a move towards climate-friendly investing will take time.

“Ultimately, this is brand new, and change is hard. Trying to do something new and managing a new and acute risk in a different way will take some time, and it's not going to happen overnight, but it does have to be done by players in the industry treating it as a public good."

However he added he was starting to see change within the sector.

“In terms of getting going, I'm quite infused by the speed of action over the last year.”

Redington agreed last month to align all client advice going forward with the Paris Agreement’s aim of reaching net zero carbon emissions by 2030.

The firm estimated that as a result of this change most clients will achieve a 50 per cent reduction in carbon emissions in their portfolios by 2030.

Mitesh Sheth, chief executive of Redington, said the global transition to net zero was a ‘monumental task’.

“Addressing the threat of climate change is no mean feat – and whilst we are working to reduce and offset our own emissions, we know that having a meaningful impact will require a lot more than this.

"Offering standalone sustainability services is also not enough, which is why we have taken this next step and committed to integrating sustainability across our entire business."

He added: “This represents the biggest transition that we as a business have gone through since our founding, but something that we believe is vital in order to truly make an impact through our influential role in the broader value chain.

“That said, the global transition to net zero is a monumental task. It will require our continual innovation, experimentation, and the sharing of different perspectives. We can only achieve this through collaboration with our clients, asset managers, industry peers, and policy makers. Together, we can make a meaningful difference.”

The firm has also hired two sustainability experts to grow its offering.

Paul Lee, who was previously head of corporate governance at Aberdeeen Asset Management, has joined as head of stewardship and sustainable investment strategy.

Anastasia Guha has been appointed as global head of sustainable investment. She was previously the director for Northern Europe, Middle East and Africa at the Principles for Responsible Investment, which is a United Nations-supported international network of investors.