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Gren Manuel Hi and welcome to this webinar on the challenges of marketing ESG financial products, especially B2B, HSBC financial products. My name is Greg. I'm the financial editor at Allana Agency. And I'm joined by three senior marketers who are wrestling every day with the challenges of marketing ESG products. We're going to be talking about issues of authenticity and complexity, how you get away from that, feel good pictures of forests on your website and create a meaningful dialogue with potential customers. I'll be talking to them for maybe 30 minutes and then we'll open up for questions. So feel free to send them through at any time using the chat function on the bottom of the screen. So who are all three experts? So in alphabetical order, we have Sarah Aird, who's global head of ESG Marketing at S&P Global. S&P, of course, is a global financial information and intelligence company. In April, it launched Sustainable One, which is an integrated group that brings together all its sustainability offerings. And Sarah is the marketing lead globally. We also have Cynthia Birchler, who's director, sustainability marketing at Bank Julius Baer and Co. Julius Baer is a one hundred and thirty year old Swiss bank that signed the UN Principles for Responsible Investment way back in 2014. Plus, we have Stephen Gunkel, who's head of communications at Pictet Asset Management, the Swiss based asset manager that manages around 250 billion. Piket has a long history of thematic investing. In fact, they launched a fund investing in water in 2000, more than 20 years ago, and their first Clean Energy Fund, way back in 2007. So that's enough from me. So I think let's get started by talking about authenticity. So my first question to all three of you is, do customers really care? So if your product is good and does the job they need to customers in a B2B space really care whether you, as a business, use renewable electricity or have gender balance in the boardroom? Is this something that they really care about? Why don't we start with Sara Aird of S&P Global Sarah? The customers really care in the B2B space.

Sarah Aird Wow. Gren. So I hope so is the answer to that question. And I'm sure so because these issues are a part of our daily lives now, you know they're in our newsfeeds they're in our peer conversations they're even in the purpose statements of our companies. So they're all around us. And I think hopefully we're all wanting to do our bit to address them because they are so important.

Gren Manuel So, Cynthia Birchler of Bank, Julius Baer, do you think customers really care when they're dealing with financial products about environmental sustainability governance issues?

Cynthia Birchler I think they do and well, I think it is a good thing. I see credibility as a prerequisite to authenticity. And so it's actually really much about them walking the talk. I would say. How can we, you know, tell about the importance of investing in companies that shows good ESG practices? If we are not ourselves taking any, any action? So yeah, I think in there in this respect, promoting diversity or ensuring solid governance and reducing CO2 emissions, what kind of things is is important to be in and remain credible? Indeed.

Gren Manuel And Stephen Gunkel of Pictet Asset Management, I mean, what are your customers saying to you? Do they do they care or do they just care about performance?

Stephen Gunkel Now, I think everyone is as described, but I think they care about both. Certainly, you know, on the institutional side, there's more and more analysis of understanding what you do as a firm, not just as what you do as an investor. But I think something that that to pick up on Cynthia's point is about credibility is also how can you engage with companies that you invest in or governments around bonds unless you actually walk the talk yourself? It's somewhat hypocritical to tell another firm how they should run their business without putting your own house in order first.

Gren Manuel So, I mean, so the issue is, is authenticity then is what you're saying, Stephen, that you know, you need to, you know, as we've heard, you need to walk the walk and things like that. But how do you how to communicate that? Because it seems to me when I look around websites of financial companies, they're struggling to get marketing messages beyond the superficial one of, as I said, you know, polar bears and trees on their website. I mean, how do you actually communicate that?

Stephen Gunkel Well, I think it really comes down to, you know, what you can prove you're doing so. So it's very easy to claim and have future ambitions. Not that there's anything wrong with having a purpose, but having a purpose often is less tangible and future orientated. But actually demonstrating what you've done, what you do as a firm. You know, we come from a financial services obsessed with data. You know, we're all we're all number crunchers every day in various forms. So you need to have something tangible to show to people. And it's not easy with ESG because the data is not always there and I'm sure that some think Sarah's much more of an expert on the me, but certainly not over claiming being authentic, bringing proof statements. It is really key.

Gren Manuel OK, so we'll come to greenwashing at the moment, but let's stick with authenticity and data. Sarah Cynthia, what are your thoughts on this?

Cynthia Birchler Yeah, I would say building on what Stephen just said, basically what? Yeah, what you do deliver. And there is also the question of what would basically your client experience in day to day interaction and business. And you know, I think authenticity implies a sense of trust and and this require also trust transparency. And I think in the day to day this, you know, the ability to be able to create transparency with your client, be it with their, you know, on the sustainability performance of their portfolio or to explain the methodology behind it or just having a very transparent conversation and well, having being able to do that and that that goes back to the complexity of data. But yeah, I think the transparency aspect is a is a is also an important one.

Sarah Aird And I agree, I think it is all about transparency and, you know, the data is available to to do that in a very number centric way. You know, I think people want to know how much carbon is embedded in an investment strategy or a company. What are the carbon savings of an alternative strategy. How many more women are being put on a board? What's the diversity of the company? What's the pay gap? You know, the data is patchy in some places and prolific in others, and there are all sorts of standards and frameworks emerging to enable a little bit more consistency about the way that these numbers are being reported so that, you know, comparisons can be made. And the more information that we put into the market, the more transparency we provide, the better the decision making will be by the end customer. And that enables us as marketers to differentiate our own products and to address the customer needs and in a better, more transparent way, I think.

Gren Manuel I mean, is it a challenge trying to squeeze data into it into a marketing message?

Sarah Aird I think the data backs the marketing message. So, you know, of course, we like high level statements about the purpose or the goals of of a strategy, but I think the subtext needs to be data driven. That needs to be some proof statements that back up those claims.

Gren Manuel And what about history, I mean, do you think that people care how long you've had ESG products and or is only people only care about the here and now?

Sarah Aird I guess, you know, heritage is always useful to to be walking the talk and learning from the market developments is always another proof point of experience. You know, the market is transitioning very quickly. You know, when when one's just integrating a high level ESG score was enough. The more sophisticated users these days want to see impact, you know, very, very discrete numbers about progress. So I think the history is important. But of course, you know, as the market grows, there will be more and more new entrants and that should be welcomed, of course.

Gren Manuel I mean, I mean, Stephen, do you do you talk about the fact that you've had products with sort of sustainability themes for 20 years or does that not really resonate with customers, do you think?

Stephen Gunkel No, it it's it's a very strong talking point for us because what we have established over, you know, two decades of somatic investing in environmental themes is expertise and experience, which helps us understand, you know, what is in a way, what's a fad and actually what is a true long term development. And, you know, as an investment house with very, very focussed on that long term investment approach, and that's very much aligned with our customers, particularly on the institutional side who have very long term investment goals. So having that expertise of that experience can bring a lot to the conversation. You have the proof statements, you are somehow your investment products are embedded in the latest learnings and you're not trying to to kind of create a resource at pace, which is perhaps happening across the industry. And I think IRA, it's quite hard to find people, actually, if you try to recruit someone in the ESG space at the moment, it's extremely difficult. So already having those skills inside your business is terribly important. The networks that you build up over 20 years are really important. It's not just about your expertise, but it's about all the people that you know and have worked with over that time.

Gren Manuel I think I think this is an area also where this is an example of where people, you know, some financial firms are overstating their ability because I know for sure, five years ago, many of the investment houses now that claim to have had a long wonderful history of ESG investing. They had one person in the corner who was managing a tiny fund who wasn't really part of their investing mainstream. And now they're claiming to have, you know, many decades of experience in this area.

Stephen Gunkel If that's just to me, just because. No, no, I

Gren Manuel mean, I mean, you know, these days, everybody claims to have been an ESG expert for for decades.

Stephen Gunkel I'm sure people are, you know, it's hard to talk about competitors. But the one thing I would say is that, you know, if we think about some of the funds you mentioned five, 10 years ago, we were we couldn't even get in the door because we were seen as, you know, a bit crackpot, a bit niche. You know, everyone had a technology fund and we would turn up with a water fund and thought we were crazy. So to be honest, we spent 10 15 years just trying to convince people that there was there was actually an investment proposition behind this. So, yeah, so you know, it's completely flipped on its head now, which is a good thing. But yeah, it's hard to talk about others, but I know that's been our experience.

Gren Manuel I mean, the central issue is talking about authenticity without appearing banal. Right? Is that the central challenge? I mean, I mean, do you think do you think that there is a problem that it's very difficult to craft a distinctive message?

Stephen Gunkel I mean, just looking at it from a communications point of view, it's very hard to stand out at the moment. You know, as you say, everyone has got polar bears and windmills on their website. That is perhaps because we have yet to establish within the industry benchmarks, comparisons, agreed datasets, agreed frameworks. There's good progress. I think it's it's really improving. You know, we've just had the SFGR regime come in in Europe. It's too early to tell whether that be successful. You know, it's got its ambassadors and its detractors. So, you know, I think that the the the direction of travel is absolutely right. But it would be fantastic to have clear benchmarks and in the way that we do for performance.

Gren Manuel Yeah. I mean, if if we're talking about brands doing something bit different, I mean, Cynthia, for instance, I mean, I noticed Julius Baer has got extensive involvement in Formula E, which is, you know, its like Formula One racing, but with electric cars. it's a fantastic sport to watch. Do you think it has a marketing impact? Has it? Has it got a value when it comes to actually selling products?

Cynthia Birchler It it has certainly had a strong marketing impact over the over the years and well, that that comes, I think also back to this question of authenticity, and I think, you know, to be authentic or to have an authentic position in it cannot only be on on a product level or only on the brand level. I truly think that the more a topic is embedded within the organisation and act upon across the various business units. Yes, the more obvious, the authentic, the message the message is and while taking the example of of Julius Baer as a global founding partner of the Formula E Championship, well, here in fact, we've been founding partner but also equity partner from day one, so investor. So also basically showing that we truly believed in the future of the electric mobility. And that has been basically on the marketing aspect. But over the year, we could also develop an expertise in it through ecosystem and not only composed of just the marketing activities, but a know, research, in-house research, thought, leadership, publication, yes, product and solution and marketing that this has evolved in the full ecosystem and actually future mobility has been part of the, you know, next generation investment philosophy for years. So basically, this is the, you know, the next gen research like focussing on the future trends. And here from the beginning, we were convinced that would not just be a trend, but really something that would shape our future. And coming again back to its authenticity, I think it's also about the ability of both partners to create something together and to shape something together. And that that has been the case is that with the Formula E and it continues to evolve. it's been Formula E, but we have also, you know, launched a partnership with Nico Rosberg, who was the Green Tech Festival and basically evolving this ecosystem of external partners? Indeed.

Gren Manuel Yeah. I mean, it's it seems that. I mean, certainly with Formula E and some of the other successful marketing I've seen, it seems that you have to be kind of bold to stand out. Is that one lesson?

Cynthia Birchler Bold, obviously. You have to be bold to be, I think, to be a first mover in whatever field it is. So bold and basically two to two to believe in the initiative. But what has certainly also really, you know, supported the whole initiative is this whole, as I said, ecosystem. It's not it's not about just signing a cheque and putting a logo on the platform. And I really think that's actually what does make the, you know, the initiative authentic, and that's also where you have the most benefit out of it. Ultimately.

Gren Manuel OK, so a couple of you use the phrase greenwashing. I mean, how much of it do you think is around at the moment?

Sarah Aird I think my perspective would be that the fear of greenwashing is perhaps larger than the impact of greenwashing right now. I think there is, of course, there's a real risk of greenwashing and the market is so young, you know, we're waiting for the standards and the frameworks. And in some cases, the data sets to evolve enough to really inform the right levels of transparency that we need. But you know, I think we see a role for ourselves, and this comes back to the credibility discussion in educating the market on what the right levels of transparency are and what best practise looks like for fund labelling, for example, or disclosure, you know, aligning with reporting recommendations, for example, or other market guidelines. So education is really important to to guide the industry in providing the right levels of transparency because ultimately we want to inform good decisions and that should be our goal as marketers to to enable the right types of decisions to be made.

Gren Manuel Cynthia, Steven, what are your thoughts on greenwashing, how much of it is there about?

Cynthia Birchler Yeah, I agree what Sarah has just said. We as a like any, especially in this audience, I guess as a marketing specialist to also reflect basically on our own responsibility and, you know, our own possible impact within our own sphere of of influence within our own firm. And and also, yeah, reflecting on what's what is done and may be challenging internally. What is about to be done? And having also this said this role, I think if we talk a lot about greenwashing and we certainly have a, you know, a possible positive influence as marketing specialist on that end.

Stephen Gunkel I mean, I agree with all that's been said and and really from a communications perspective, because I'm not an ESG expert, but from communications perspective, I think what you must do at all times is, you know, anything you say must be supported by evidence. You know, we must be evidence based in our communication and we shouldn't be making claims. And I think what's happening across the industry is there's great ambition and that's fantastic. But at the same time, without that evidence, it's actually really hard to sift through all the claims and work out what's credible and what's not. And so over time, hopefully people will be able to build that, that track record that evidence based content that they can share with clients and then people will feel reassured. And I think that's what people are looking for. You know, they'll be looking for the brands that can actually bring expertise and can demonstrate over time what it is they've tangibly done. If you think about investment in itself in a strange way, you give me your pension fund and I'd say I'm going to deliver this in 20 years time and you only find out in 20 years time. So there's an element of trust that comes through brands with brands, and that trust comes through expertise and quality. But because there's a lack of evidence of expertise and quality around ESG factors, we don't yet have that trust. And so of course, it's very easy to to make all sorts of accusations about greenwashing. But at the same time, you know, I don't think the industry is helping itself by perhaps just rushing towards this with, you know, marketing messages which are not really substantiated with evidence.

Gren Manuel Is the issue, not complexity? Because it seems that I mean, one of the challenges that ESG financial products are simple in concept, but often very complex in reality. I mean, there's a whole spectrum of products, some of which basically aim to replicate non ESG products, but with an an ESG way right to others where investment performance is almost not relevant. What you care about is your impact on society, and this is sort of a whole spectrum in between. So there's a whole, you know, it's just a very complicated business what each product does and how it's constructed. Is that not the central challenge as a marketer that you know you've got this complexity which you're trying to simplify and boil down?

Stephen Gunkel You're right, but in some ways, it's a bit of a challenge as a marketeer because you want to create a norm so that you can show that you're different to the norm. It's always going to be that tension that exists between, you know, communicating what you do and the commercial desire to be different. So, you know, until we get those norms and we have those those buckets and you know what goes into each bucket. And that will take time to establish. And you know, the recent regulation is a step in that direction. I think it is going to be complex and, you know, we could get a more into complexity. But you know, I think, you know, Cynthia and Sarah might also have different perspectives in their phones.

Gren Manuel Sarah, do want to talk about complexity?

Sarah Aird Sure. I mean, of course, it's complex. But but so is financial information. And I think, you know, we learn to deal with certain amount of uncertainty and financial information. And ESG information is the same. We should not shy away from the complexity, we should embrace it. And I would like to see one day where, you know, we have a set of standard metrics for ESG that appear as visibly as financial metrics on all financial products. You know, what is the temperature alignment of that fund? Is it on a one and a half degree trajectory? Fantastic, or is it on a three to three degree trajectory in which case we might start to ask some questions about the strategy? What is the water dependency or consumption in certain regions where water scarce? What is the diversity factor? And then that comparison can be made. You know, we will always be trading off in our decisions. Financial performance is always going to be important. But then the investment philosophy of ESG can also be elevated as a primary consideration.

Gren Manuel Is there not an additional issue that ESG is being bought for many different reasons and each purchaser has their own thing that they're interested in in terms of performance or, you know, transition risk or anything like that? So this is not a problem.

Sarah Aird I don't think so. I think it's it's just akin to going to the supermarket and choosing your yoghurt. You know, some people want a high dairy capacity, others want a low calorie capacity. You know, everyone has their own decision making strategy. And that's what makes marketing so engaging is that we have to match customer needs to our product credentials. And as long as we provide the transparency to enable our customers to make informed decisions, I think we're doing a good job.

Cynthia Birchler I see as well that even maybe as a, you know, an opportunity to to have this personal relationship with the client and basically also to to go beyond the financial return discussion. Yes. Yes, it is important, but also to to go into that space where, you know, to to know what the person care about. And and we obviously see that more and more investor do, I mean obviously do care about sustainability issues.  And yet there are individual preferences, whether they want to act on climate or on wealth inequality or on, you know, education. And so I this is, in my view, actually very interesting that part of the challenge and it goes back to what Sarah has mentioned a couple of times, clients education, I think financial literacy and also enabling people to know what impact social and environmental impact their investments have and is like just the basis to enable them to then choose from the range of of possibility that we would like them to to have.

Gren Manuel I mean, is there is there a problem with, you know, regulators demanding too much in the way of boilerplate and disclaimers and things of that? Does that does that make it difficult to get a clear message through?

Stephen Gunkel No, I think the regulator is there to try and help people, you know, make make informed decisions. You know, we follow the guidance. We're all following the same guidance, which I think does help. And there's always every firm has their own interpretation of something. But, you know, regulation generally provides a direction of travel. It never provides the final final framework. But I think what it's doing is it's pushing asset managers to think about what it is. They've got its portfolios, but more importantly, to start thinking about how they're going to report on that and how that's going to be, you know, checked and that, you know, are you Category six, Category eight, Category nine? Some of that is driven by what you you say the intention of your fund is, but ultimately they are then going to be looking at well are you actually meeting that objective in the same way that five years ago they were looking at asset managers? Are you a closet tracker? There will be a reckoning as to what you say vs. what you deliver. And so I think that's that's a good thing. You know, it's a good thing that we're being tested in that way. It's probably not perfect now, but you've got to start somewhere.

Gren Manuel But also, it can create this idea of the the product category, which you were talking about earlier. At the moment, you know, if you've got a global equities fund, everybody knows what a global equities fund is. You can just go out and compare them and choose the best. But with ESG products, a lot of them at the moment they're not they're not comparable. And you're often trying to, you know, work out with non comparable products, which is the best. Regulation could potentially allow you to create buckets of products which can be compared between.

Stephen Gunkel I absolutely think that over time, the combination of regulation in the industry will find ways of grouping strategies and products. The challenge a bit with ESG and even the taxonomy that sits around it is ESG can be in a standard portfolio. So even just the global equity fund will have some kind of ESG component. You know, firms have been looking at governance for a long time. That's not new, you know, considering environmental risks, you know, just as an investor, when you are looking at your portfolio, you have a heavy exposure to emerging markets. We reach a temperature of two degrees and beyond. Some of those countries that are really at risk, really at risk. And you know, it's a terrible thing. But as an investor, you have to think about that. You have to think about what is, you know, what what is actually going to be too big a risk to bear in my portfolio. So it's not all in practise, it's about risk. And I think a lot of certainly active managers are already thinking about those things. You know, if you if you're heavily exposed to mining stocks and coal producers, et cetera, at the moment, that probably doesn't look like a great investment. You know, it might have some price volatility, which you might benefit from in the very short term, but long term, that doesn't look like a great investment right now. It's probably a good thing, but that's a personal view, not an investment view.  

Gren Manuel OK, well, okay. So this is actually you can you can take a glass of water now, Stephen, because actually, this is a question more for Sarah, which is about the issue of geographies. So although ESG is a sort of a concept, it has very different flavours in different geographies. I mean, in ESG in Europe is very much about climate change, and carbon in the U.S. is much more of a focus on social inequality. And in Asia, there's a lot of more focus on worker safety and rights. I mean, how I mean, you have a global remit. I mean, how do you how do you handle this? Is it all about local campaigns? How do you deal with these different nuances?

Sarah Aird Well, it's such a great question. And of course, we are regional in our approach in many ways, and we do cater to the needs of our clients in various regions. You know, the data sets, we have a thousand data points on any one company, so we are able to inform those strategies. But I think what we see as the market matures is that there is a growing understanding that ESG is risk and opportunity and climate in particular. Of course, we're just out of COP and about to head towards Davos. There's a growing understanding that this is a global problem. And, you know, I don't know how many taxonomies there are growing right now.

Gren Manuel 27, I think.

Sarah Aird No more, more. You know, it's an issue for every country. You know, every country is transitioning. Every country needs different solutions, has different stages of development and the solutions need to be local. But investors are global. So, you know, an investor in Europe is looking at countries in developing markets and they want to know what the climate risk is. So there has to be disclosure and there has to be a strategy. So I think the local lens will always be present, but I think the local lens is increasingly a global denominator where people need to get to a common basic level, at the very least.

Gren Manuel So there's a convergence, would you say?

Sarah Aird I think that's just growth. I think more and more everybody is understanding the value of ESG considerations and the future direction of the economy, and these things will not be a fad. They will become business as usual, you know, in the not too distant future where it just is a common part of the decision making process.

Gren Manuel OK, I just want to remind the audience that we'll just be moving to questions after this. I've got one last question and then we'll be moving to take your questions. So if you want to use the chat function down below to ask a couple of questions, That would be great. And my final question is this I'm just trying to look forward a little bit. It's clear that ESG products are becoming more mainstream and probably will become the mainstream in maybe five or 10 years. Do you think the challenges of of marketing them will eventually be overcome? Why don't we start off with you, Cynthia, first, what do you reckon?

Cynthia Birchler I think, yes, some of them indeed having you know what, like basically basic level of understanding and common common language and and having those, you know, being able to compare Apple with Apple and products, and then it will also actually enable to have another level of granularity and also another level of differentiation, because that's also the challenge now, right? We do not really know what we compare. And then it's it's kind of also difficult to position the product to position and offer an offering because nobody really know what we yeah, how to position. That's in comparison to something else. So having been a, you know, a standard understanding of that will certainly give them the better, I think a differentiation opportunities. And and yes, I really think that, you know, I know not such too distant future we won't need ESG or sustainability any more in front of all what we would do. It would just be, you know, the new normal as we use, as you know, digital technologies.

Gren Manuel Sarah of S&P I mean, can you see that day coming when almost the letters begin to disappear?

Cynthia Birchler Yeah, I think just as Cynthia said, I think as the market evolves and the frameworks around which people are reporting on, these considerations become more standardised. This is just going to enable really, really good pure innovation. You know, the opportunity to really address the needs of the economy to grow in the right directions. You know, what solutions do we truly need to finance? How do we measure the benefits of those solutions? And how do we put out thought leadership to our clients to help them understand the impact and the contribution of their investments? So I think for marketing, it is just going to get more and more exciting and and the opportunity is just going to grow and grow to to gain an advantage through ESG considerations.

Gren Manuel And finally, Steven, of Pictet you were nodding furiously through all that, I mean, what do you think of the state of marketing of ESG financial products would be in five or 10 years time?

Stephen Gunkel I think that it will become a little bit as described, it is not just purely ESG, but wHile there is this notion of greenwashing and, you know, perhaps cynicism of what's happening in terms of launching products. But at the same time, I think most investment firms on average are pretty good at what they do. And so, you know, what's happening here is we're going to have a shift in the economy. We're going to have to have a shift in the economy. And so as investment managers, we need to be looking forward to that for our clients from a, you know, just from a pure investment perspective. As I mentioned, there are lots of industries which are going to come under pressure and they will have to reinvent themselves and they will have to think about what products and services they're going to offer because consumers will make the choices. Governments will will put in heavier regulation. They will have to change. They will have to measure and monitor it and demonstrate their own footprint. And some industries will really come under pressure as to whether they will survive. And so we have to view this in a way, as a bit of, you know ... Maybe I've just bought into the COP thing because I want this to happen, but as I say, in a way, it doesn't look a great investment to be investing in oil and coal, particularly when wind and solar is actually cheaper to produce just the pure economies of it. If you're a government, are you going to build a new coal fired plant or you're going to build a wind farm? If you're getting more value out of a wind farm, the economy of scale, it's just going to push you in that direction anyway. So I think that asset managers can be good at that. It's about the framing of it. Maybe at the moment there is a cynicism and we're being criticised. But you know, in the long term, we're going to have a shift in the way we all behave and what we do now. It might not be as quick as we think, and I can't remember who said this, I think it was Bill Gates, but we always overestimate the impact in the short term, and massively underestimate the impact in the long term. And I think that's what's going to happen. There's going to be a long term change. And at the moment, it's being framed as ESG, but it's probably what the future looks like like Cynthia and Sarah said.

Gren Manuel Well, that's a very that's a very positive comment to finish off with. I just want to go through to a couple of questions which we've had from the audience and here we've got one from Alexine. I hope I'm pronouncing him right, Alexine which is actually a pretty interesting question, which is in terms of avoiding, you know, comments about greenwashing. Is there any sort of index we could join? It's almost as if. Is it possible to get like a stamp of approval without you know that you could say that, you know, our claims have been checked and we have been proven, to be honest, almost like, you know, you count on some of the consumer products it's tested by the Consumer Safety Board or something like that. Is that what's missing some kind of approved stamp that you could put on your materials?

Sarah Aird Gosh, I think I'll jump in there, I think there are hundreds of labels that you could choose from, and that might be part of the problem, that there are just so many labels that seek to do different things. But I think if you're aligning with the prominent market frameworks, there are the key ones that that you can report to. And I'm just like, we've said, you know, back up the claims with data driven insights and I think you're on safe ground. You know, it's about credibility and being data driven at the heart.

Gren Manuel Cynthia, Stephen, have you got any thoughts. I mean, it's almost like a fair trade, you know where you can just get a label on your product and everybody will accept it as just being honest? Is that is the issue that there aren't enough of them or is that there's too many?

Cynthia Birchler Yes, and well, so far, obviously, they are also, you know, I've seen many different reporting like the one of the first like label would be like, you know, the reporting standards that you would join. And well, I think like if, if you know, we would, we would already achieve like an alignment on the reporting part that would also, you know, just just help this comparison. And and and then it the the label, whether the label or not. And if people are able to compare, then, you know, maybe just a label is not not not not what is the most needed anymore. They will just be able to make their own informed decision. The end.

Gren Manuel And then we have I mean, here's a question, based on what you see from your competitors, do you think that customers have got a long memory if you are found to be greenwashing?

Stephen Gunkel I mean, I think that it's sort of obvious in a way. It takes years to build trust and it takes minutes to destroy it. So I think you've got to be true to your brand and you've got to be, you know, credible in what you say. But just anyway, I think you know, it's, you know, even beyond ESG. I probably in my role in communications, I probably worry more about, you know what we don't say or shouldn't say than I do about what we do say, in essence. I find the red pen comes out a lot more than that, you know, the approved stamp. And so I think, you know, it's any situation where you're talking about trust. You've got to work really hard at it.

Gren Manuel Yeah, but I mean, there's nothing, nothing it's nothing special about ESG. I mean, I don't know how long it took the financial industry to recover trust after 2008. Maybe you could argue it still hasn't quite got there yet. People have got long memories, no matter what your transgression it is, whether it's ESG or salaries or anything else that a financial firm does. The customers have got very long memories for mistakes.

Cynthia Birchler Indeed. And I think as well obviously did that. That's the question about what what we would say or not say. But actually, it it is much, obviously a much more than that, you know, about building a solid governance and having system in place. And because actually, you know, the bad news or the scandals would come out anyway? But just it's really much about having those system in place so that it doesn't happen before the communication part of it when it comes to that communication. I would say it's a bit too late. It's probably,

Gren Manuel yeah. And I just want to squeeze one last question in from Rajesh, which is that it's not a very good point. So we've talked a lot about, you know, data is the way to, you know, to get away from this sort of the blandness of messaging and back up your claims with data. But the problem is, of course, that data is a very fast evolving issue in the ESG space. And, you know, everybody has different data. If you go to a carbon calculator, it gives you different numbers. How do customers believe data, how can you make customers believe that your data is accurate, good enough and you've picked the right data to back up your marketing message?

Sarah Aird Gosh, I'll take a quick stab at that. I mean, of course, you know, there's there's lots of data providers just as there are a lot of investment managers out there and you know, you have to make robust decisions based on quality credentials and heritage. And you know, the expertise of the people that you speak to and data quality is is really important. I lworked with an analyst recently just to try to look at how many reporting errors we correct. We engaged with, I think around 15000 companies every year to collect their environmental data. We take what's in the public domain and then our analysts check it, and a third of disclosure is actually inaccurate. Today we collect thousands and thousands of mistakes across a third of disclosure, so you just need to ask the right questions of your data providers. Are they scraping data in automated ways, you know, using AI technology and other things? Or is there a human interface that's actually going in and checking the data and making sure that it's standardised, validated and, you know, appropriate for use across an investment portfolio that there's lots of questions that need to be asked when when choosing your data provider, but certainly quality is a key one.

Gren Manuel I mean, do you think that some cases people are using this as an excuse for inaction? You know, people just sit on the sidelines, you know, the data is not ready? You know, we can't really do anything, but actually what they really want to do is as little as possible.

Sarah Aird Yeah, I think I think in some cases, there's a fear that the data is not good enough, so wait, and the data will improve, but what we would say is that, you know, start integrating the data today into your models, that the data is good enough to inform decisions and it will get better. So the resolution of your decision making will improve over time. But if you don't start today, then then you're going to be left behind. That would be one way to look at things.

Gren Manuel I just wanted to get one quick answer, and if you could just answer quickly, I guess it's I think I know what your answer to this is going to be, but I think it's important to ask anyhow, which is one of the questions we've been asked is ESG a fad? In three years time will we have been moved on would be all talking about virtual reality or some other trend. I'll take a quick answer from each of you?

Cynthia Birchler Well, I'll jump in. I mean, sustainability, the sustainability discussion and sustainability issues, certainty are here to stay. I mean, the challenges are here and there needs to be to be addressed. So definitely this is here to stay. Now, whether you know this is, this will be the the topic on which we will try to make the most differentiation or not or whether there will be other hot topic. Obviously, there will be other topics. I just think that the level of discussion will, yeah, will change and improve over time. Once we will have this accurate, transparent, enhanced transparency, a communist understanding, et cetera, as we've been discussing. But sustainability itself, or ESG is, I think, going to going to stay with us for quite quite a bit of time.

Gren Manuel Sarah, Stephen but will but will the vocabulary change even if the theme is with us?

Cynthia Birchler Gosh, I think we've all seen, you know, coming out of COP the commitments even just on one aspect of net zero. One aspect of ESG, which is net zero, you know, the commitments of spending 20, 30, 40, even 50 years in the case of some countries. So this is a long term challenge. And the journey is far from certain. Nobody could hand on heart say they know how we're going to get to net zero. We do our best to calculate near-term action plans, but it's a whole transition across many different industries and, you know, requires an incremental journey step by step. So I think the journey ... We know where we need to get to. We don't know how we're going to get there. And I think this is something that we all need to engage on together and knowledge, share and educate and be patient while the standard setters come together to guide us in the right direction. But yeah, I certainly think the challenges are long term and they're going to be around for a while.

Stephen Gunkel I agree with everything that's been said. The only thing I would add is that it probably just makes investment sense, because where there's change and where there's innovation, there's investment opportunities. You know, I think history has proven that time and time again when there's, you know, changes in the way the economy works, whether it's the industrial revolution, whether it's the invention of the engine and the use of oil as a source of power, when there's changes, structural changes, there are investment opportunities. I think all good active or even just all asset managers will , you know, look at that and they will see that as an opportunity for their clients. And so however you frame it, name it, the taxonomy may evolve over time. I think it just makes investment sense.

Gren Manuel OK. Well, I think that is a very upbeat and optimistic and note to end our discussion. I'd like to thank all participants, which is Sarah Aird, who's global head of ESG marketing at S&P Global. Cynthia Birchler, director of sustainability marketing at Bank Julius Baer and Stephen Gunkel, Head of Communications, Pictet Asset Management. But most of all, I'd like to thank you the audience for listening. I know a lot of you had some questions which I'm afraid we weren't able to answer. If you found this useful, it will be available on replay. So please share it with some of your colleagues. And I really hope that it's if you're involved in the marketing of ESG products, particularly ESG financial products, that our discussion has been of use to you. So thanks very much.

Want to find out more about how alan. can help you with your ESG strategy and communications? Contact us on 020 3877 3800 or email contact@alan-agency.com.

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