ESG: "We are at the beginning of a journey"
Top managers and investors discuss ESG aspects. Climate protection, social responsibility, and good corporate governance are not only becoming increasingly important to companies and shareholders, but should also be an integral part of their investment decisions. In an interview with Deutsche Bank Wealth Management, Alexander Doll, Head of Thematics & Strategy, explains how sustainability can be integrated into the investment process and highlights opportunities and risks.
ESG has become a top issue for society and politics, it is also playing an increasingly important role for companies and investors. According to a study by the Global Sustainable Investment Alliance (GSIA), global investments in sustainable funds rose by 29% to over 35 trillion US dollars in 2020.
What do you think are the reasons for the increased interest in ESG?
Investors are increasingly realizing that ESG factors can have a significant impact on the financial performance of a company. For example, companies that are well positioned in terms of climate protection and sustainability are often more resilient to climate-related risks such as extreme weather events. Furthermore, social and ecological challenges have become increasingly complex and globalized in recent years. For companies, it is therefore becoming more important to contribute to a positive social and ecological development. For example, companies can reduce their carbon footprint, offer employees attractive working conditions, and avoid bribery and corruption.
As a result, more and more investors are focusing on companies with sustainable business practices. This is particularly the case for institutional and professional investors and among younger investors.
How does Deutsche Bank support its clients in integrating ESG aspects into their investment decisions?
At Deutsche Bank Wealth Management, we offer our clients a variety of options for investing sustainably. For example, we have developed a range of sustainable funds that invest in companies with a strong ESG profile. We also offer our clients the opportunity to invest in individual ESG-compliant companies. In addition, we have developed a digital ESG investment tool that allows clients to create a personalized ESG portfolio.
What opportunities and risks do you see in ESG investing?
ESG investing offers investors the opportunity to make a positive contribution to social and environmental development and at the same time achieve attractive returns. In the long term, we believe that companies with good ESG practices are more likely to be successful and resilient than those that do not. However, investors should also be aware of the risks associated with ESG investing. For example, investing in specific ESG themes can be cyclical
What do you recommend investors to keep in mind when investing in ESG?
Investors should first define their own sustainability goals and priorities. It is also important to understand that ESG investing is not about excluding certain sectors or companies, but rather about selecting companies with good ESG practices. Investors should also be aware that ESG investing is a long-term investment strategy. It may take time to see the full benefits of ESG investing.
How do you see the future of ESG investing?
We believe that ESG investing will become increasingly important in the future. This is because investors are becoming increasingly aware of the impact that their investments can have on the world and they want to make a positive contribution. In addition, companies are increasingly realizing that they need to adopt sustainable business practices in order to remain competitive and successful in the long term.
We are therefore convinced that ESG investing will continue to grow in importance in the coming years. We are at the beginning of a journey.
