J.P. Morgan Chase & Co. Headquarters, J.P. at Park Avenue. Morgan Chase Tower, Midtown, Manhattan, New York.
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Singapore – Although there is “nothing new” to sustainable investment, JPMorgan says technology has made it easier for financial litigants to consider non-financial metrics.
“The amount of data that we as investors can use to facilitate dialogue with companies is greater than ever,” said Jennifer Wu, the bank’s head of global fixed investment.
From artificial intelligence to big data and machine learning, information is now available to better measure environmental factors and their economic impacts, he said. For example, satellite images can be used to observe and measure a company’s actual environmental impact, such as pollution levels.
Noting the significant change in the last three or four years, Wu said, “This is a very powerful one.” “It’s not something we (before) had access to, but now it’s possible.”
This could spell a positive shift to the sustainability agenda that has long lagged behind economic gains.
Ultimately, investors are often driven by financial returns, Wu noted. But the wide range of data means that banks can now do a better job of proving to customers the potential returns and losses of such investments.
Jennifer Wu is the global leader in JPMorgan Sustainable Investment.
“The debate is not so much‘ I don’t care ’,” Wu said, as the debate is about whether the assumptions are correct.
“Do I really see a loss of value in my portfolios or businesses over the next five years? Or is it like three years or 10 years?” He explained.
However, public policy is important to ensure that environmental practices are properly implemented and implemented.
“The policy environment is very important here,” said Elsa Palanza, a member of Barclays’ Global Stability and ESG Chair.
Barclays has increased interest in sustainable products from its corporate bank customers, who are mostly based in the UK and Europe, where environmental policies are advanced, Balancea said. Balanza said demand from its investment bank customers – which are mostly US-centric – was low.
“We can reasonably expect some changes, but we can not fully lean on it,” he said, noting the impending change in the US administration as President-elect Joe Biden prepares to take office in January.
There is a lot of work to be done in this regard. However, Wu said he was “very optimistic”.
“Today, policy directions are very clear and committed from governments, policymakers and institutions, and this is far more than I said three or four years ago,” he said.
“Especially with Govit this year, one thing has become very clear: it’s very important, it’s very big and there is a great appreciation for how important it is that we have to be prepared for something that will disrupt everything,” Wu said. “In my mind, I’m very happy to have more constructive conversations with clients.”