Know-how and massive knowledge may result in sustainable investments
The headquarters of JP Morgan Chase & Co., the JP Morgan Chase Tower on Park Avenue, Midtown, Manhattan, New York.
Tim Clayton – Corbis | Corbis Sport | Getty Images
SINGAPORE – While sustainable investing is “nothing new,” the technology has made it easier to state the financial reasons for considering non-financial metrics, according to JPMorgan.
“The amount of data that we as investors can use to support dialog with companies is greater than ever,” said Jennifer Wu, the bank’s global director of sustainable investing, during a panel discussion at the FinTech Festival in Singapore.
From artificial intelligence to big data to machine learning, the information is now there to better measure environmental factors and their economic impact, she said. With satellite imagery, for example, a company’s actual environmental impact, e.g. B. the degree of soiling can be observed and measured.
“It’s something very powerful,” said Wu, noting a marked change in the past three or four years. “It’s not something we had access to (before), but it’s possible now.”
Show the money
This could mean a positive change for the sustainability agenda, which has long lagged behind economic gains.
Ultimately, investors remain largely driven by financial returns, Wu noted. By disseminating data, banks can now better demonstrate the potential gains and losses from such investments to their customers.
Jennifer Wu, JPMorgan’s global director for sustainable investing.
“The debate isn’t so much ‘I just don’t care,” “Wu said, noting that the debate is about whether the assumptions are correct.
“Am I really looking at potential depreciation in my portfolios or businesses over the next five years? Or is it closer to three or ten years?” She explained.
Politics remains the key
However, public policy remains important to ensure that environmental practices are properly implemented and implemented.
“The political environment is very important here,” said colleague Elsa Palanza, Barclays’ global director for sustainability and ESG.
Barclays has seen an increased interest in sustainable products among its corporate bank customers, most of whom are based in the UK and Europe, where environmental policy is advancing, Palanza said. Still, there are no inquiries from customers of the investment bank, which mainly focuses on the US, said Palanza.
“We can probably reasonably expect something to change, but we also can’t quite rely on it,” she noted, referring to the upcoming change in the US administration as President-elect Joe Biden looked forward to taking over January prepared.
Today the political directions are much clearer and engagement from governments, policymakers and corporations is much, much more common than it was three or four years ago.
JPMorgan, global leader in sustainable investing
Much work remains to be done in this regard. However, Wu said she was “quite optimistic”.
“Today the political directions are much clearer and the engagement of governments, policymakers and corporations is much, much more common than I would say three or four years ago,” she said.
“One thing became very clear this year at Covid in particular: The importance of being prepared for something that is so systemic, so big and can disrupt everything is much better appreciated,” said Wu. “I am very happy that I can have much more constructive discussions with customers.”
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