For financial professionals only
Time for change in our Ethical Oversight Committee
After a decade as Chair of Parmenion’s Ethical Oversight Committee (EOC), Julian Parrott is handing the reins to fellow committee member Chris Hegarty.
We spoke to Julian about a decade of extraordinary change, and what might lie ahead for the world of ESG investing.
Reflecting on the past 10 years…
Increased interest driven by the Blue Planet and the ‘Greta effect’, the wider range of investment assets and different styles of ethical investing available now, and greater adviser engagement all mean the opportunities in ethical, responsible and sustainable investments have really ratcheted up, particularly in the last three or four years.
There’s more understanding, wider acceptance and advisers are more enthusiastic to learn more about how to invest ethically.
Working with Parmenion…
I always wanted to spread the word about ethical investing in adviser communities and to see more money in responsible and ethical mandates. Working with Parmenion, I’ve been able to achieve far more than I could ever have myself over the last 10 years.
More and more advisers are now coming on board and using the Parmenion service. I’m really pleased about that because I think we’ve fashioned something quite unique in the marketplace in terms of breadth of exposure and breadth of risk positions.
The obstacles ahead…
I think the biggest obstacles, despite increasing buy in, are still greenwashing and scepticism.
There’s a lot more ESG data out there and that’s important when people have different aspirations or expectations of the ethical, sustainable, responsible market.
The challenge is communicating that ESG data in a meaningful and usable way. Regulatory requirements are likely to demand more ESG data and an interpretation of what you’re doing with investments and why. That can be quite a challenge for anyone who doesn’t have the experienced fund research and due diligence capacity that professional investment management teams can provide.
Keeping the customer front of mind…
We all need to be thinking about the ultimate end users of the service we provide – not just the advisers but their clients too.
It’s an important part of the EOC’s role to be alert to market developments and demands and to raise anything we feel it’s pertinent to consider with our retail audience in mind – something that I know Chris and his colleagues on the committee are excellent at.
Advisers as heroes
We live in both worrying and exciting times. We’ve got the climate change issue, but we’ve also got a considerable uptick of interest in how money is managed over the past few years.
I recently heard Professor Hugh Montgomery, a leading light in the medical thinktank that described the climate crisis as risking “catastrophic harm to health that will be impossible to reverse.”
He suggested that the financial advice community could be potential heroes in this scenario.
As people who can allocate and direct resources, we are in a fantastic position to support people who want to be positive with their money. There needs to be huge change in the next 10 years. It’s a very exciting time to be involved in this sector.
And a word from our new chair, Chris
My aim will be to maintain the culture of sharing and challenge that Julian has established in the committee. There are often different or diverging views amongst the group and that debate helps us come to the best possible recommendations as a group.
Sifting out those fund managers who are doing things in a better and more meaningful way is an important and valuable function to have and that’s where the EOC comes into its own.
I’ve known Julian for more than 20 years and have learned a great deal from his depth of knowledge, both in terms of what investors are thinking and how they might like their values to be aligned with their investments.
We wish Julian all the best as he turns his focus to his own business, and a bit more time for mountain biking.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity.
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