Marie-Laure Schaufelberger is a key figure in the field of sustainable finance. Pictet Group’s Head of Sustainability, who has also served as the President of Sustainable Finance Geneva for the past three years and Vice-Chair of the annual Building Bridges Summit, is someone with convictions, which her employer has always promoted since she joined the bank.

Having gained experience in corporate sustainability and as a product specialist for Pictet’s thematic investment strategies, in 2018, she put forward a proposal to the Managing Partners to create a head of sustainability position for the Group. “We already had well-positioned products on the asset management side but we also had to think about private wealth management, and create a real culture of sustainability, reinforcing it as part of our DNA and our business model.” Her arguments hit home.

A unified vision

Five years after her position was set up, she is now head of Pictet’s newly created Group Sustainability Office, reporting directly to the Managing Partners in a strategic cross-functional role.

Schaufelberger’s team is working on understanding Pictet’s environmental and social footprint, which mainly comes from the investments it manages on behalf of clients. This includes analysing the impact of shareholder engagement and client mandates. “Responsible, credible and solid products and solutions should emerge”, she adds. “Performance indicators will be used to measure that.”

Impact, in addition to ESG

Sustainable products focus primarily on environmental and social impacts. They focus on alternatives to fossil fuels, but also regenerative energy. The latter “involves investing in businesses that repair and replant natural areas and regenerate the soil.”

In the early days of sustainable finance, the notion of ESG was limited to managing the impact of environmental, social and governance factors on a portfolio’s risk/return profile. Now, the aim is to make a real impact, as well as deliver financial returns. It is possible to beat the market through positive impact investments in some sectors, but requires fundamental analysis and rigorous stock selection.

“Companies having a positive impact account for only a fraction of the market today,” says Schaufelberger. “The key is therefore to identify companies that are in the process of transitioning their businesses towards a more sustainable alternative. This can include the transition from fossil fuels to renewables, and all those companies that are going from brown to green, from degenerative to regenerative.”

This universe spans across listed assets to private equity and real estate. The latter sector is energy intensive and needs to make the transition to much more energy-efficient standards, with an accompanying re-rating. “Large institutional clients are the largest property owners, so the stakes are high for our pension funds.”

“European regulations have played a major role in aligning standards and promoting transparency and end-client protection,” says Schaufelberger.“However, if regulation becomes too prescriptive and not incentive-based, there is a risk of simply ‘ticking boxes’ in terms of compliance rather than redirecting capital towards solutions that have a positive impact and help with the transition. What is true for regulation is also true for the framework conditions and when it comes to developing new investment vehicles and managing systemic risks. We need a much more sustained dialogue between governments, civil society and economic players, in the form of public-private partnerships.”

Adapted from the article by Myret Zaki, originally published in French in Bilan.

– Author: Marie-Laure Schaufelberger, Head of Sustainability, Pictet Group

– This contribution is brought to you by Pictet Group, a valued diamond event partner of Building Bridges 2024.