In light of growing awareness among clients that there exist investable ESG solutions that do not compromise on returns, Credit Suisse Private Banking is ramping up efforts in both client and relationship manager education to increase the penetration of its ESG assets under management.
“We have US$1.3 billion AUM in sustainable assets in APAC, which is about 6% of Credit Suisse’s global AUM in sustainable assets,” Joost Bilkes, head of impact advisory and finance, Asia Pacific at Credit Suisse, told Asian Private Banker.
“The increased penetration of these assets is achieved through a combination of education of clients on the topic as well as the continuous development of the sustainable and impact investment product offering that is relevant for clients in Asia.”
What the Swiss heavyweight is looking to cater to is a growing interest amongst its private banking clients towards allocating capital to address their “purpose and values” through impact investing.
“We see clients being increasingly open to using other forms of funding, apart from philanthropy (i.e. impact investing) to address the social and/or environmental issues that matter to them, such as poverty alleviation and climate change,” said Joyce Chee from IAF, Asia Pacific at Credit Suisse.
“We see clients unlocking the capital that they have been using for investing to simultaneously generate financial returns and address their social purposes.”
Speaking to this shift in sentiment through client education initiatives that run the gamut from networking events to whitepapers, the Swiss lender seeks to put across the message that impact investing is a sustainable approach to addressing the variety and complexity of today’s social and environmental challenges.
Further, impact investing has become an important tool the Swiss private bank uses to engage its next-generation clients, particularly as the latter’s parents are looking to do the same.
“This is especially so for some next-generation clients who return from universities in the US and Europe and are very keen in aligning various aspects of their lives with their values and beliefs but have been generally rather disinterested in being involved with the family wealth,” Chee revealed, adding that the bank has managed to actively engage many of them “through the topic of impact investing”.
According to Credit Suisse’s recent next-generation report, 27% of next-generation leaders cited “creating a positive impact in society” to be the most important factor in building a legacy.
Separately, 24% are already invested in impact investments and an additional 62% are interested but not yet invested. It was also reported that 13% of respondents are hoping to create social change through a business offering.
“We run programmes to help the next generation feel more confident in dealing with finance, investments and areas they are passionate about — such as impact investing — and in helping to better prepare them for the responsibility of running the family business or managing the family’s wealth,” said Bilkes.
Through initiatives such as the Credit Suisse Young Investor Program, the private bank seeks to help its next-gen clients align their interest in impact investing with pertinent matters relating to family wealth, such as succession planning.
“In these sessions, after exploring the fundamentals of impact investing, the participants are engaged to consider actual business models and evaluate them based on a set of guidelines, giving them a taste of an impact investment selection process,” explained Bilkes.
To equip its relationship managers with the skills and discussion points to adequately engage with clients of various profiles on impact investing, the private bank has sought to embed the topic — including the fundamentals of impact investing, market trends and developments, opportunities in Asia, and case studies — throughout training and development.
“The topic of sustainable and impact investing is a core topic of their onboarding curriculum,” said Bilkes, adding that various training sessions have also been designed for RMs as part of their continuous professional development.
“This has been well received, and RMs have also been actively bringing in members of the impact advisory and finance department APAC to engage with their clients on this topic.”
Established in 2017 to direct, coordinate and facilitate bank-wide activities that lead to sustainable finance and impact investing, the Impact Advisory and Finance department is a global division led by Marisa Drew, who reports directly to Tidjane Thiam, Credit Suisse’s CEO.