Asset manager of the year: Deutsche Asset Management
With competition for insurer-owned assets heating up, asset managers are striving to improve their services and provide insurance-focused solutions. An increasingly important element for insurers is responsible investment, in particular, the use of environmental, social and governance (ESG) risk indicators.
Deutsche Asset Management (Deutsche AM) has been building is own "ESG engine" software solution to equip its managers to deliver ESG value to clients. At its core, the ESG engine is a data consolidation, aggregation and mining device, which allows objective data-driven ESG analysis, based on expertise from seven leading ESG data vendors (Ethix, MSCI, Oekom, RepRisk, Sigwatch, Sustainalytics and TruCost).
The manager's focus in 2017 was consolidating its "ESG engine" capacity and rolling it out across the company. This included establishing its Minimum ESG Standards (MESGS), which now serves as a mandatory framework for all its ESG retail funds. The MESGS cover corporates, sovereigns and green bonds.
Among several updates to its ESG engine, Deutsche AM implemented more elaborate screening techniques, replacing the previous binary screens. The most notable change is that it now allows positive factors, such as use of renewable energy to be taken into account, which can offset the prevailing negative legacies of fossil energies.
The firm's ESG methodology is continually developing, and the next project will deliver carbon and climate sensitive investment opportunities in line with the UN Sustainable Development Goals. Deutsche AM is also looking to make ESG a factor which can be integrated in a flexible, but not necessarily exclusionary part of its investment solutions.
