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BNP Paribas WM launches sustainable equity discretionary mandate

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Garth Bregman, BNP Paribas WM

BNP Paribas Wealth Management has launched a sustainable equity discretionary mandate in Asia that adopts a traditional ESG approach, APB Mandate can reveal.

The innovation is in line with the bank’s commitment to sustainable investment, as part of its “2020 Vision”.

Speaking with APB Mandate, Garth Bregman, head of portfolio management, Asia, BNP Paribas Wealth Management, noted that though the demand from Asia clients for ESG-screened solutions in the discretionary space is nascent, the private bank is keen to be “at the forefront of what will eventually be a growing trend in Asia”.

“We invest across different sectors and industries, with a positive screening / best-in-class approach that takes into account extra-financial environmental, social and governance criteria, as well as traditional fundamental analysis,” Bregman added, pointing to the importance of ESG to the bank’s business in Europe.

Demand for sustainable investing has grown steadily in recent years. According to data from the Global Sustainable Investment Review, US$22.89 trillion of assets, globally, were professionally managed under responsible investment strategies in 2016 – an increase of 25.2% compared to 2014.

Europe and the US lead the pack, together accounting for over 90% of the total in 2016 in terms of assets, with Asia lagging the pack.

In a recent interview, Robeco’s head of ESG integration team, Masja Zandbergen, said that the firm is seeing greater interest from both institutional investors and private banks in Asia towards sustainable investing strategies.

“Speaking to clients in the region (both institutional and private banks especially the global banks), many are interested to learn more about how they can implement sustainability investing [in their portfolios],” Zandbergen noted.

“In Europe, specifically for private banks, we see those that are able to capitalise on this trend were able to attract relatively larger flows versus their competitors.”

Perhaps unsurprisingly, millennial HNWIs have proven themselves to more willing than older investors to pursue ESG-screened investment strategies. In a survey conducted by FactSet with 1,022 HNW and UHNW respondents across the world, over 60% of millennials said that they “expect their wealth management firms to screen investments” based on ESG factors. By comparison, 53% of investors aged 35 to 54 share the same sentiment.

Accordingly, Zandbergen said that private banks need to seriously consider the younger generation to attract future clients and assets.

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