Social Responsible Investing (SRI) is gaining ground across the European asset management industry, but Italy's is still weighted to the retail investor.
Social Responsible Investing (SRI) is gaining ground across the European asset management industry, but Italy’s is still weighted to the retail investor.
SRI as a term stretches to include sustainable, socially conscious, green or ethical investing, and generally describes an investment strategy which seeks to consider both financial return and social good.
Support comes from a number of sources, such as the Association of the Luxembourg Fund Industry (Alfi), which has been leading several initiatives to raise awareness among investors and asset managers.
In a KPMG survey done on behalf of Alfi, responsible investing funds’ assets under management were reported as having increased by 19% from €199.9bn to €237.9bn since 2010, with the proportion of SRI assets compared to total assets in European funds increasing by 1.6%. Despite the strong growth in relevant AUM, challenges remain as managers try to either implement SRI or encourage it towards becoming considered a mainstream approach.
The KPMG/Alfi survey set out five action points calling on industry participants’ help. These include:
• Asset managers should pursue transparency;
• ESG (Environmental, Social and Governance) information should be properly supported and concrete consequences should be demonstrated in terms of investment performance;
• The European Commission and national regulators must take concrete action;
• Investment industry associations should cooperate on national transparency initiatives; and
• Responsible investing organisations should focus on the verification of information and data provided by asset managers in order to avoid subjective information.
At a European level, the European Sustainable Investment Forum (Eurosif) is a pan-European nonprofit network which brings together institutional investors, financial services providers, academic institutes, research associations, trade unions and NGOs for total AUM of €1trn. The board of directors currently includes representatives from the Netherlands, Austria, Germany, Switzerland, UK, Italy, France, Spain, Sweden and Belgium.
Davide Dal Maso, secretary general of the Italian Forum for Sustainable Finance (FFS) says SRI in Italy is still a challenging topic for a number of reasons, but it definitely has its market share having managed to attract a good number of investors and fund selectors over the past decade.
As Dal Maso explains, FFS has currently more than 40 members including banks, insurance companies, asset managers, NGOs and trade unions. “FFS works both on long term programmes with institutional and retail investors as well as being a lobbying force which interacts with the authorities to propose new regulations,” he says.