7: Andrew Parry of Hermes Investment Management - Sustainability Is An Imperative And The Beta Of Future Growth

Andrew Parry is Head of Sustainable Investing at Hermes Investment Management. 

In this episode of Impact Leaders, Andrew shares his insights from years of experience in sustainable investing and why he is optimistic about the direction where we are heading. Responsible investing has always been at the core of Hermes, and they have been at the vanguard of ESG investing for more than three decades. Hermes is in fact a founding signatory of the Principles of Responsible Investment (PRI) when it was launched by the UN in 2006.

Hermes was established in 1983 as the principal manager to the BT Pension Scheme and, as of December 2018, it managed £33.5 billion of assets and engaged on £389.4 billion in assets. The company now employs 200 investment and stewardship professionals, with 448 total staff, in its London head office, Singapore and New York.

What sets Hermes apart is the focus on stewardship in impact investing. Andrew says, “we don’t want to be absentee landlords”. They have been actively engaged with government, shaping policy and standards as well as recognising the need to create demand for positive impact. 

Highlights of this episode include:

• How to take impact investing from private markets into the public markets

• Why it is important for companies to be socially responsible

• From Socially Responsible Investing (SRI) exclusions of negative screening to Environmental, Social, and Governance (ESG)

• Building great Impact Investment Funds

• Focus on stewardship, influencing behaviours in government and creating demand

• If you can measure it, you can manipulate it

• Importance of impact narrative and setting clear goals which can then be reported on

• How to avoid Sustainable Development Goals (SDG) washing and Man City’s 5 goals assumption

• How millennials are inspiring Andrew and importance of learning from clients

• How SDGs are the new opportunity

Useful links:

Hermes Investment Management - https://www.hermes-investment.com/

Andrew Parry’s Linkedin - https://www.linkedin.com/in/andrew-parry-bb48a79/

Ørsted (formerly DONG Energy) - https://orsted.co.uk/en

PRI Principles of Responsible Investment - https://www.unpri.org/

UNEP FI Positive Impact Initiative - https://www.unepfi.org/positive-impact/positive-impact/

Chapters:

[4:10] Pivotal moments and changes in the last 30 years?

[11:45] Long history of Hermes Investment Management in impact

[19:50] Behaviour change on the demand side

[27:00] More people want to engage in ESG

[30:00] We need to think about stranded business models

[33:00] How to differentiate between traditional ESG funds and Impact funds

[43:00] Why it is important to think about impact narrative 

[46:00] We are still a long way away in aggregating product level to company level impact

[40:00] Engagement, education, transparent reporting

[55:00] Importance of answering the why question

[58:00] Hurdles to promoting impact investing, not just excluding oil and gas assets

[1:03:00] How we can help encourage business model transition as a way of future growth

[1:05:00] Scaling impact investment to achieve SDGs

[1:10:00] What drives Andrew Parry? What is leadership to Andrew? 

Connect with JP Dallmann on Linkedin, Twitter, or Instagram.

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Impact Leaders is produced and published by Woon Tan of Podcast Publishing