Invesco integrates ESG factors across all asset classes and sectors
Every dollar of the USD1.5 trillion under management at global asset manager Invesco will be managed with ESG factors integrated into every decision by 2023, says Cathrine de Coninck-Lopez, Global Head of ESG at Invesco.
Of that total, USD52.7 billion, as of June 30, 2021, is in nine ESG ETFs in Europe and three ESG ETFs in the US.
Cathrine de Coninck-Lopez, Global Head of ESG at Invesco, newly returned from Cop26, explains that she joined the firm in 2017 in the UK investment sector, from Columbia Threadneedle, with the focus of making ESG fully embedded in the investment process at the firm.
2019 saw her take on the global role with a change in the way that the ESG function was perceived to be more part of the overall investment process. The team is now 20 people who sit within the global investment function, across all the asset classes and product types.
Her focus is on clients and product distribution, research and engagement, which is the biggest part of the work managed by a team of eight, practical voting and stewardship which is a huge part of the integration of the investment process, and data and analytics.
Commenting on the voting and stewardship issues, de Coninck-Lopez says: “We set global guidelines bringing global Invesco insight into the views and governance and creating and honing the policy for the investment teams that they can override - but they have to justify why they do that.”
When de Coninck-Lopez took over the role they set the target of being a leader in ESG by 2023. “We want to be recognised as a leader through excellent research and integration everywhere and our engagement and voting for specific outcomes.”
She believes that ETFs have a role to play in implementing ESG in portfolios. “They are quicker to launch and systematic because they have to be with all the data that underpins them,” she says, “so you can be more clear in terms of the transparency angle but that comes with the flip side which is that they can be a bit of a blunt tool.”
Over 2020, Invesco had 2,000 company engagements on ESG which she believes sends a clear signal that ESG matters from a corporate angle which gives Invesco a huge influence in the real world – ESG is now integrated in the secondary influence in the 10,000 companies in which the firm invests. “Being Invesco has such an added benefit as we have active and passive funds and a direct link between the two,” she says.
If the active book of business owns the same holding as the ETF within the company, then the firm goes with the active perspective and the ETF benefits. “It’s fairly unique,” she says, “and it’s our proprietary technology systems that automate it through our Proxy Intel program.”
de Coninck-Lopez reports that she found Cop26 a glass half full experience where the more negative perception of finance in the past is slowly fading away, which is a good thing. “Now the whole dialogue is around how can finance be part of the solution,” she says. “The conversations I had with NGOs and policy makers were more ‘how can we meet and support each other and make this a common goal and achieve it’. I found this encouraging from my perspective because there had been that negative rhetoric.”