Real-Life, Sudden-Death for SRI Shops...Just Like the Rest
Millions have lost jobs, and some of those have directly impacted SRI. In the numbers are real lives of real people. Including investment people. SRI shops are no different. The 2008 financial meltdown began with a whimper in July 2007 with HSBC shutting sub-prime broker in the US and ended with a bang when the G20 came together holding onto their briefcases by their fingernails the week of March 31 in London. SIFs around the world (like UKSIF) pitched the G20 for some sustainable finance answers in a statement. Along the way many businesses took evasive action and cut the obvious "variable cost" of people.
The story is not new; Responsible Investor.com and SRI Extra covered it amongst others in Q4 2008. But WSJ Europe Banks Cut Back Analysis on Social Responsibility 11 June did see fit to cover it again last Thursday, reflecting a slow news day, the interest of Thomson Reuters in SRI, or the fact that the story remains news in the City and on the continent. From comments at events in LDN, GVA, STO and AMS the past weeks, it may well be the latter. This in a time when we need even better understanding of what makes investment, and business, sustainable.
Responsible-Investor.com's editor Hugh Wheelan covered the end of the JPMorganChase team in LDN in December 2008 (nice cold capitalist move, hey? Just in time for Christmas at home with the family...) with a re-org to put SRI into the general research coverage JP Morgan ends dedicated ESG research coverage.Â Deutsche Bank followed shortly thereafter Deutsche Bank joins ESG cuts by ending corporate governance research trimming the team, although the NYC-based climate team remained including Bruce Kahn whom they had poached from a financial consultant role with Smith Barney about a year earlier. DB has spun off on the whole climate change gig, DBCCA.
As always there is a silver lining. The analysts that were cut from large shops have the option to freelance, create new ventures like Mike Tyrell ex-Citi now with Sustainable Investor.org, or hired in by the ESG research specialist shops like Sustainalytics, or buy-side investors like Dutch mega-pension fund asset manager APG hiring new ESG staff this May (nice offices right above Schiphol airport). For those left standing, good times: Credit Agricole Cheuvreux's Stephane Voisin, Head of Sustainable & Responsible Investment and SocGen Co-Head of SRI Research Sarj Nahal both have stronger teams in my opinion (see Sarj's excellent 2008 Africa Factor report. Good for new horizons too: Goldman Sachs GS Sustain team has now mushroomed from humble beginnings in London, Sarah Forrest is now in Asia-Pacific and Marc Fox in the US. The upcoming Responsible Investor.com Integrating ESG Into Portfolios session in NYC should give us a good sense of where things are at on 25 June in Manhattan. It's probably also not a great time to have an i-bank hire you coming out of your MBA-program. Which explains why MBAs are re-thinking their futures. How is the market looking for you as an experienced professional or newbie into the world of ESG in investment management?