Something a little different from The MWek Company this week as our capital markets guy, Aj Rakhe, talks about a change in view in the landscape for ESG data.
“A number of years ago, I bet that I was not the only one that turned the page, scrolled past or sighed and rolled my eyes at the mention of “ESG strategy”. I was adamant in my view (as someone who has worked within fixed income for most of my adult life) that an investor would only really be interested in sustainability data if it had a material impact on the return on a particular investment or set of investments. The fact that data or research into sustainability topics was so heavily dominated by such a small number of firms also made me question the validity of financial institutions paying up to have the tools to create such a strategy.
The ‘cartoon lightbulb above my head’ moment happened when a couple of clients started acquiring firms which gave them access to climate change data and I was able to see how such data could materially affect the price of certain bonds (I am a fixed income nerd after all). Combine this with a set of usable ratings, a set of regulations and ‘clean’ data (no pun intended) and an abundance of investors willing to move capital from less compliant to more compliant investments and the eye rolling from earlier became eyes wide with excitement. A number of new and exciting firms continue to appear and address issues around regulation and sustainability, challenging what for many years had been practically a duopoly.
As the number of new firms and established firms looking to enhance their own solutions within the ESG data/ regulations/ strategy space increases, the challenge to find good talent for these firms grows too. It certainly helps that with increased media coverage regarding sustainability issues, more people with a genuine interest in the sphere are attracted to the market. It is with these people – smart, dedicated and with a passion for a cause that I continue to want to work with. Shameless quote from Rocky 4: “if I can change and you can change, everybody can change”.
Others in the industry had their lightbulb moments long before I had mine. Far from being a ‘nice to have’, an ESG strategy is fast becoming a ‘must have’, if it isn’t already. If you are a capital markets data, research or technology firm engaged in ESG, or looking to scale anywhere in the world in sales, product or technology, please get in touch with Aj (and be ready for more quotes from 80’s films)”.
Contact Aj Rakhe – https://www.linkedin.com/in/ajrakhe/