“Switzerland is on the verge of the next evolutionary step in sustainable finance”

Dr. Martin K. Weber
Chairman of the Board, Robeco Switzerland Ltd., Zurich

 

Mr. Weber, Robeco is now cooperating with the University of Zurich and the ETH in the area of sustainable investing: What was the trigger for you to seek this cooperation?

Robeco has always followed a research-based approach. To be able to continuously achieve high-quality data selection and interpretation in the field of sustainability, I think it is important to have a professional exchange with leading educational institutions. The establishment of corresponding academic networks is therefore also a focal point of our strategy. The ETH and the University of Zurich together cover the disciplines that are essential in the field of sustainability and are global leaders in this field. It was therefore clear to us that we should bring both institutions to the same table so that research can be carried out in cross-institutional teams and available data can be exchanged. To this end, we have now established an in-depth professional exchange.

The cooperation also sends a strong signal to the international competition, it was said. Why is this signal needed?

This signal is needed because Switzerland must assert itself as an international centre of competence for sustainable asset management. To this end, it should also take a leading role in research and education in sustainable finance.

Where does Switzerland stand in terms of fulfilling its claim to leadership in sustainable finance?

Switzerland is on the verge of the next evolutionary step in sustainable finance. Both science and business are gearing their activities to sustainability criteria - on the one hand due to the strong demand for sustainable products and on the other thanks to a liberal legal system that provides targeted incentives and at the same time does not stifle the diversity of ideas. The task now is to better link the existing competences, data and findings and to jointly develop them further so that Switzerland can implement its leading role in this regard.

With the increasing market volumes in Sustainable Asset Management, competition is rising: What are the differentiating features, does it remain the premise that a financial return should continue to be the be-all and end-all of an offering?

The increasing competition raises the quality of sustainable financial products. One differentiating feature is that the asset manager can measure the sustainability impact of his investments transparently and according to the most modern scientific principles and show it to clients in a comprehensible way. In this context, it is important to clearly distinguish between impact indicators (what does a company achieve with its products and services?) and ESG indicators (how does a company operate?). A financial return should continue to be a key objective of an investment strategy. And companies with strong ESG metrics often perform better financially. I believe this trend will intensify. Accordingly, one does not exclude the other.

Robeco is a Dutch asset manager that has bundled its sustainability expertise in Zurich. Why?

It is true that Robeco has bundled a significant part of its sustainability expertise in Zurich with the specialised departments "Sustainable Investing Research" and "Sustainable Investing Data Engineering", and that the thematic investment strategies are also managed out of Zurich. This is due to the fact that Robeco acquired the Swiss pioneer SAM Sustainable Asset Management in 2006. In addition, there are highly qualified employees here (e.g. environmental and material scientists, data scientists, specialised portfolio managers and analysts), a thoughtful regulator and progressive institutional clients who appreciate this sustainability expertise on site. Robeco also operates an international "SI Center of Expertise" in Rotterdam, which works closely with the Zurich competence centre.

Could this also be a sign to the international asset managers, who primarily value the Swiss distribution market?

Absolutely. Especially in connection with sustainable financial products, distribution to local institutional clients works better anyway if the relevant competencies are available locally and the sustainability aspects of the investment solutions in question can be discussed in depth. As a location, Switzerland already offers good conditions for building up sustainability competencies or, in the case of Robeco, expanding them. However, the quality of the location remains an ongoing issue.

Would you place the area of sustainable finance on a legal footing?

In principle, sustainable finance operates within the same legal framework as the rest of the financial market. For example, the prohibition of deception under Article 12 of the Collective Investment Schemes Act is also relevant with regard to preventing and combating greenwashing. Additional measures of financial market regulation may make sense where climate-related financial risks are addressed or where product transparency is to be improved in terms of investor protection; for example, asset managers would have to disclose their methods for measuring the promised sustainability impact of their products in a transparent and comprehensible manner.

As a lawyer, how did you come to asset management?

As a lawyer, my focus is on private equity/venture capital, financial market regulation and related investigations (e.g. on unauthorised activities or greenwashing). Accordingly, I regularly assist financial institutions, investment funds and asset managers with regulatory issues or represent them in proceedings. I thus knew asset management from a regulatory perspective. On the other hand, I have always been interested in the business models and minds of such companies, which is why I am involved in certain fintech, legaltech and greentech companies as a board member or active shareholder.
Both experiences ultimately led me to Robeco, where I now have the pleasure of helping to shape the local strategy and governance of a globally recognized provider of sustainable investment solutions as Chairman of Robeco Switzerland Ltd.