Investment manager La Financière Responsable has called on fund managers to show that their investments are truly sustainable and not just greenwashing.
The firm warned that amid growing interest in environmental, social and governance investing, many asset management companies are falling into the trap of greenwashing and marketing rather than investing sustainably.
Guillaume Gassmann, fund manager and analyst at La Financière Responsable, said: “The future for ESG investing is bright but it’s time to go one step further and show that firms are investing sustainably, taking into account how strict regulation is.”
Gassman said there has been a rise in demand by clients for more information on ESG investments.
“Clients are now very demanding, much more so than a few years ago. Interest is growing rapidly. Companies also report much more data in this regard and clients also ask for more to ensure that they invest in companies that take ESG criteria into account.”
According to La Financière Responsable, institutional investors show the greatest interest compared to individuals who sometimes fail to understand the regulatory differences between products.
Ines Segueni, fund manager and analyst at La Financière Responsable, commented: “Regulation is key to understanding what ESG investment is and having greater transparency in products, differentiating those that are truly sustainable from other greenwashing efforts so it is okay to create common frameworks and indicators. But I think the regulation is moving very fast today. Rules are made but they are difficult to implement immediately and deadlines for doing so are very tight.”
La Financière Responsable added that the greatest challenge is to make regulation clear and easily understandable for private investors, but said regulation should not increase restrictions on fund managers.
Nicolas Thery, head of socially responsible investing at La Financiere Responsable, said: “One of the risks in this regard is that there will be less and less diversity in the ways in which ESG is managed, interpreted and included in investment processes.
In 2017 MAPFRE, the largest insurance group in Spain and Latin America, acquired 25% of the capital of LFR, and in 2023 it raised its holding in the firm to 51%.
“Since 2017, we have been committed to sustainable investment and LFR has experience of almost 25 years in this segment as a whole. Over the last five years, we have launched SRI products together, which make use of LFR’s proprietary methodology in the final selection of the securities that form part of the fund portfolio, something that is highly valued by our clients,” said José Luis Jiménez, MAPFRE’s group chief investment officer.