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Vontobel: Islands that count in the sea of sustainability

In the sea of sustainable investing, it is important to concentrate on the islands that count and do what you are good at. Vontobel’s approach is rooted as much in tradition as in active management, i.e. deep research, stock picking, company dialogue, and integration of ESG aspects in the investment process. 

Tradition heightens credibility

Sustainable investing has become a bit of a buzzword in asset management, sometimes leaving investors lost for choice. One aspect that can distinguish one investment firm from another is tradition, according to Vontobel Chief Executive Officer Zeno Staub. “A lot of the thinking that comes with ESG obviously leads to a long-term perspective, something that in some instances got lost in the financial industry or in the day to day hectic financial markets. We have the privilege of having an anchor shareholder that truly acts across generations,” Staub said in a video on the occasion of Vontobel’s participation in the “50 sustainability & climate leaders” initiative, an international project to highlight companies’ sustainability achievements.

Multiple challenges – and opportunities

Investing in accordance with environmental, social and governance standards covers a vast expanse of possible topics. It encompasses areas as diverse as the gender pay gap, clean drinking water, or global warming, according to Dan Scott, Vontobel’s WM Chief Investment Officer and Head of Impact & Thematics. But these challenges also point to investment opportunities in asset classes such as equities, bonds, and multi asset. “What we’re doing is investing in companies that have innovations, ways to solve problems. As an investor, our role is to help finance the business model of a company that, for example, will provide clean drinking water,” Scott says.

Balancing out different interests

At first sight, asset management and climate action seem to have little in common. Yet the contribution of investment firms shouldn’t be underestimated. Even so, it is important to strike the right balance between the environmental benefits, profits for shareholders and income for employees, according to Sudhir Roc-Sennett, Head of Thought Leadership & ESG at Vontobel’s Quality Growth boutique. Engaging with the companies is also crucial. “All businesses are run by people, and so you have to talk to them about their goals and how they are evolving,” Roc-Sennett adds.

Deep research and ethical questions

Active managers like Vontobel that construct focused portfolios of suitable equities or bonds rely on specialised in-house research. Analysts track a multitude of indicators including ethical ones, says Lara Kesterton, Head of ESG Research at Vontobel’s mtx boutique. “ESG is really about assessing a company’s performance on its real world issues, so this can range from strikes in its supply chain to questions regarding child or forced labor,” she notes. 

The world is changings and so are asset managers

There is no question that sustainable investing will continue to evolve, also because governments and regulators around the world are now looking more closely at such strategies.  “The world is changing, and if you want to deliver value to your clients, you need to take care of the ESG side of things as part of your business and investment analysis,” says Lukas Münstermann, Vontobel’s Senior ESG Investment Specialist. For this, “ESG needs to be part of the overall investment philosophy. It needs to be part of the investment process. It needs to be part of each and every investment decision,” Münstermann adds.

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