Gilles Rollet, an investment banker with over 30 years experience in the financial services and asset management industry, has turned his attention from wealth creation to environmental conservation through sustainable investment. Rollet’s investment portfolio has in recent years focused on robotics, data and public health, but is now diversifying towards investments that meet “Environment, Sustainability and Governance” (ESG).
ESG are standards for three categories that are used by socially conscious investors to screen potential investments to understand the impact of a company’s activities on the environment. These standards and adherence to them are vital if we’re going to meet the targets for zero-net carbon emissions, but they are important well-beyond our concerns over the atmosphere; they apply to habitats, labor and anti-corruption. Consumers and investors are becoming more savvy with their investments, with Morgan Stanley reporting that a survey of individual investors showed that eighty-five percent of the general population and ninety-five percent of Millennials now express interest in sustainable investing. This interest in ESG has been followed by huge investments into ESG portfolios, with some reports placing the value of global ESG related investments at US$17.5 trillion.
Over the past years, there have been numerous guidelines for ESG, from voluntary standards, reporting frameworks to national legislation. The differences between the methodologies can be confusing for companies or have allowed ESG reporting to be misrepresentative of their commitment, but ratings agencies like Morningstar through forensic studies showed US$1 trillion worth of ESG investments weren’t meeting the necessary criteria.
“The enormous investment and scale of the market through the increased consciousness of investors, particularly millennials whose importance is rising as they inherit or accumulate their own wealth, has led many companies to promote ESG values while showing no genuine commitment. The removal of 1,200 companies from having an ESG rating by
Morningstar, is certainly positive, ESG isn’t something you can just talk about, it requires action.”
Rollet is cautiously optimistic about recent developments in the formation of interoperable conventions for ESG, “There are promising international standards, such as the Global Resource Initiative. The GRI updated their Universal Standards in the latter part of 2021. The GRI is the most common and accepted international standard, and the new updates are welcome. They will come into effect in 2023, so businesses that will use the GRI have time to assess and adapt.”
Rollet, an avid scuba diver, has seen his hobby turn into a passion, and is exploring how to become involved in the preservation of coral reefs. “When you see human impact, through climate change and warmer waters, to destruction from pollution that stems from industry, the idea of ESG isn’t a compliance line item - the fact that we’re on the precipice of the collapse of whole ecosystems which will affect billions of people becomes a vivid reality. At the moment, I’m understanding how to best use my skills and experience to make a positive and real change in reef conservation, whether that’s through advocacy or establishing a foundation, it’s something I am committed to.”
