The struggle to incorporate ESG into portfolios

RIAA/JBWere/

19 April 2022
| By Laura Dew |
image
image
expand image

Advisers face challenges when it comes to assessing the ESG characteristics of unlisted assets as the industry lacks a consistent standard.

Speaking at the Responsible Investment Association of Australasia (RIAA) conference in Sydney, Gillian Gordon, head of alternative investments and responsible investing (RI) at JBWere, said there were difficulties once investors moved away from listed equities.

“The challenge we have as an adviser industry is you can have many, many different funds and how do you compare and contrast them? There’s no consistent industry standard that every fund manager adopts.

“Each fund can report separately but as soon as you get a new fund or a new geographic, that’s a real challenge to compare and that’s something that has to be solved,” she said.

“It’s really easy for listed equities, finding information in fixed income is pretty good but as you go into alternatives, that’s pretty bad. You can get the data really well on the listed side but not great on the unlisted side, it becomes harder outside of listed equities.”

A ‘nirvana’ for her, she said, would be the ability to see the RI characteristics across a client’s whole portfolio, the same way as she could see their financial returns.

“The challenge the industry faces is to how do you get enough data to see that level of information to make an informed decision and give them that transparency?

“Nirvana for me would be producing a client report of their whole portfolio and seeing the return, risk and RI characteristics across the entire portfolio, I want to be able to see the whole thing. The industry is trying to get there but unfortunately we are not there yet.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

1 month 4 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

3 weeks 3 days ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 2 days ago

The Federal Court has made interim orders to freeze the assets of a managed investment scheme, its responsible entity, and a director....

1 month ago

TOP PERFORMING FUNDS