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  • Writer's pictureJan Åge Skaathun

Factors for Successful Sustainability Integration in Investment Advisory

Quantfolio recently had the privilege of hosting a webinar on Sustainability Assessment in Investment Advisory where we explored 3 interrelated perspectives from industry leaders: Storebrand as an institutional advisor, Morningstar as a data vendor, and Quantfolio as the solution provider.

Three colleagues engaging in a graph on a computer screen

Below, we briefly outline what was discussed and the insights provided by each of the speakers from the expert panel.

Key challenges facing asset management companies

Anna Jönsson, the Chief of Institutional Clients and Distribution at Storebrand Asset Management, addressed three of the key challenges faced by an asset management company.

The first challenge is reconciling a diverse range of products and asset classes with their high sustainability ambitions. To address this, Storebrand aims to shift focus from describing sustainability processes to highlighting actual results and outcomes. Anna also emphasized the need to structure and integrate new data and information in a systematic manner.

The second challenge revolved around addressing diverse institutional client knowledge and preferences across different countries and within each country. Storebrand seeks to streamline their work and processes while being ready to address in-depth inquiries. Anna Jönsson highlighted the significance of incorporating institutional client preferences in their product development and stressed the importance of collaboration and customization to fulfill individual client requirements. The third challenge centers around navigating evolving regulations efficiently. Storebrand aims to balance compliance with current regulations while preparing for future changes. Anna explored the trade-offs involved in implementing streamlined and scalable solutions, which would require adhering to the most conservative regulations among the countries in which they operate. She also stressed the importance of collaboration with Quantfolio and other asset managers to navigate the changing regulatory landscape effectively. Our favourite quote from Anna’s speech on the webinar is: “Having the best data, the best solutions in the backend is not sufficient if we cannot effectively communicate and convey that information to our clients, and for that we need specific tools.” We at Quantfolio are proud to provide exactly the tool needed for the task.

“Having the best data, the best solutions in the backend is not sufficient if we cannot effectively communicate and convey that information to our clients, and for that we need specific tools.” - Anna Jönsson

Availability and utilization of data in sustainability integration

Anastasia Georgiou, Head of Adviser Solutions, EMEA at Morningstar focused in her presentation on the availability and utilization of data in identifying suitable investments that align with client preferences. She highlighted the challenges faced by advisors in balancing regulatory requirements with meeting client needs, particularly due to the lack of comprehensive data coverage for sustainable preferences defined by regulators. Anastasia addressed the low data coverage for taxonomy alignment and the reasons behind it, including the cautious reporting practices of asset managers to avoid accusations of greenwashing. She emphasized the need for more company-level data to improve taxonomy alignments over time. Anastasia also discussed the breakdown of Article 8 and 9 funds in Europe, highlighting the percentages of funds reporting data related to MiFID preferences. She emphasized the differences in coverage for minimum sustainable investment, taxonomy alignment, and consideration for Principle Adverse Impacts (PAI). The data gaps and lack of standardized indication in calculating sustainable investments pose challenges for advisors in aggregating and analyzing data from client portfolios. The importance of understanding client investment preferences was also touched upon. Through a survey conducted in the UK, different personas emerged, including Eco Warriors and Social Champions, who prioritize sustainability over financial return. Other personas also showed varying levels of sustainable preferences, indicating the relevance of sustainable considerations even among those focused on financial returns.

The integration of sustainability assessment into investment advisory flows

Sanna Lutsoja, the Head of Sustainable Investment at Quantfolio, discussed the integration of sustainability assessment into investment advisory flow. She outlined a step-by-step process with three main stages. The first stage involves defining the vision, determining the level of ambition, and formulating a strategy. This step requires significant effort and preparation as it lays the foundation for the entire integration process. Once the strategy is established, the next stage focuses on presenting it internally to advisors, educating them, and preparing them to effectively use the assessment. This phase ensures that advisors are well-informed and equipped to implement the assessment with confidence. The final stage is going live with the solution. However, it's important to note that this is not a one-time event. Continuous feedback from advisors plays a crucial role in refining and improving the assessment over time. Regular education based on this feedback ensures an ongoing and iterative process of enhancement.

Power your sustainability integration efforts with Quantfolio

Collaboration, customization, and digital tools were identified as the key factors in achieving successful sustainability integration, and we would like to thank our guest speakers Anna Jönsson and Anastasia Georgiou for providing these valuable insights from industry leaders on the integration of sustainability assessment in investment advisory. Quantfolio remains committed to providing the necessary tools and solutions to empower advisors in their sustainability efforts and deliver optimal outcomes for clients.


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