According to Arabesque's board vice chair, Georg Kell "These tools allow investors to single out the best and worst performers. They can make comparisons across industries and countries, which is a powerful way of rewarding as well as shaming in certain circumstances."
Investors can do ESG metric segmenting within their portfolios. "For example," Kell notes "human rights advocates complain that their issues get sidelined because investors tend to measure what’s convenient instead of what is impactful. ESG metrics have become a lens through which to shine a light on the issues that are important to the particular investor or advocacy group."
"Asset managers like Arabesque, that have invested heavily in sustainability can now be appreciated," says Kell "and the process can reveal the laggards to stimulate change among that group."
"I see Arabesque as having unlimited opportunity in the U.S.,” says Krumsiek “with pension funds and high-net-worth individuals looking for bespoke investment solutions, as well as endowments and foundations, which are embracing ESG strategies through their consultants."
"Arabesque will also appeal to retail investors through its recently launched Systematic USA Fund, a 40 Act mutual fund administered here and offered through U.S. distribution platforms and RIAs."
Feiner adds "The reason Arabesque was started is to channel capital into better run companies whose products and services have value for consumers and society, and to make more money for investors. As long as we deliver on this mission we will have a huge market."
"The three things we must do to be successful here in the U.S. are: first, continue the focus on performance and show that ESG supports that; second, use the available data to do good research; third, communicate this message to mainstream investors using available media tools."
Krumsiek says "It’s a tribute to the foresight of Arabesque's founders that they are very grounded in research. Robert Eccles, the chairman of the board, is an icon in the academic world after a distinguished career at Harvard and now Oxford. He is a thought leader in the field of creating sustainable value through ESG."
CEO Omar Selim says ESG is "the fourth dimension of investing, which give investors more information about the DNA of a company. For example, how risk taking or risk averse is the management. We believe the ESG data set is about 10 percent today of what it will be in the future."
Paul Ellis founded Paul Ellis Consulting to work with financial advisors who want to integrate sustainable and impact investment strategies for their clients.