Portfolio Insight – Cambridge Associates INTERVIEW – ANNACHIARA MARCANDALLI
ESG: A CUSTOMISED APPROACH
Annachiara Marcandalli, partner and European head of sustainability and impact at Cambridge Associates, sits down with portfolio institutional to discuss the politicisation of ESG, diversity, greenwashing and competitive advantages.
How important is sustainability to your clients?
There has been an incredible rise in inter- est in ESG and sustainability over the years. It’s worth noting, that many of our clients have always been interested in sus- tainable investments; more than 60% of our client base are non-profit and endow- ment institutions, who tend to be value- driven investors. So it is fair to say that this interest, which has become main- stream, has always been evident within a large proportion of our client base. When I started working at Cambridge Associates 23 years ago, at least 10% of our clients were integrating sustainability and impact into their investments. That number leapt to 30% in 2018, reaching 60% two years later. That is quite a jump.
We are in the process of finalising the numbers for our 2022 Sustainability and Impact survey and we expect even further growth, since a third of our clients who previously did not integrate sustainability and impact into their portfolios, said they were interested in doing so.
What ESG and sustainability issues are in- stitutional investors discussing with you? There are three big themes. The first is full integration. There is a growing appre- ciation that sustainability is a better way for institutions to be long-term investors. But those investors who are only doing this in parts of their portfolio, are realis- ing that a lack of integration throughout could be a problem for returns going forward.
26 | portfolio institutional | December-January 2023 | Issue 119
Most of our clients are looking for full integration, rather than focusing only on certain issues. It is about the recognition that there is materially economic infor- mation out there that can be used to make portfolios more resilient, either by lower- ing
risk or through achieving better
returns. More than 70% of our clients want sus- tainability throughout their portfolio. What they want to know from us is how to use sustainability data to achieve better investment outcomes.
The second theme is climate change. I would distinguish between clients build- ing climate-aligned portfolios and those clients who work towards net-zero tar- gets. A climate-aligned portfolio will focus on net emissions in order to avoid unnec-
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