Mike Fox, head of sustainable investments at Royal London Asset Management (RLAM), explains why environmental, social and governance considerations are core to the asset manager's philosophy and approach
Investment team of the Year (Asset Manager) - RLAM Sustainable Investment Team
This year's winner demonstrated the growing role environmental, social and governance (ESG) criteria have come to play in the investment decision process.
Royal London Asset Management's (RLAM) sustainable investment team manages its sustainable funds in the belief that, in the long term, ESG risks and opportunities are as important in determining investment outcomes as traditional financial analysis, and that it is only by combining the two that one makes successful investment decisions.
The team's three core principles are:
- Financial returns: Well-managed companies by ESG metrics are likely to be financially well run – in basic terms, sustainable investing improves returns.
- Social and environmental improvement: Companies that address social issues or environmental challenges through innovation are more likely to succeed over time.
- Engagement: No company is perfect and engagement to make the case for higher standards or a different approach not only helps to make society better, it can improve financial returns by highlighting problems in advance.
John Burke, head of institutional business, said the firm's multi-asset, equity and bond funds had attracted significant inward investment in recent years with plans to extend the range further.
Last year was a defining one for sustainable investing, Mike Fox, head of sustainable investments added, with those companies at the heart of the sustainable fund movement helping others deal with the pandemic.
"This, combined with a greater acceptance of sustainable investing as a way of helping clients meet their investment goals, has led to much increased interest in RLAMs Sustainable funds," he explained.