Climate Action

Sonia Fasolo on how ESG can improve performance in the long term

Ahead of the Sustainable Investment Forum Europe 2020 taking place in Paris on the 10 March, we caught up with Sonia Fasolo, Fund Manager & Head of SRI at La Financiere De L'Echiquier, to discuss how ESG can improve performance in the long term.

  • 05 February 2020
  • Rachel Cooper

Ahead of the Sustainable Investment Forum Europe 2020 taking place in Paris on the 10 March, we caught up with Sonia Fasolo, Fund Manager & Head of SRI at La Financiere De L'Echiquier, to discuss how ESG can improve performance in the long term.

Q. Can ESG drive up performance and if so how?

One of the most widely spread misconceptions about responsible investment is its inability to generate good financial returns. At LFDE, with 13 years of responsible investing experience on listed equities, we have a strong conviction that SRI and performance are not incompatible, quite the opposite! Last year, we decided to conduct a study to confirm this conviction and the results are impressive.

ESG drives up performance in the long run. Our SRI & Performance study, conducted on European listed equities, proves that there is a strong correlation between ESG ratings and stock performance. Investing systematically in companies with the highest ESG profiles delivers, over 10 years, a performance twice as strong as investing in companies with poor scores.

The reason is simple: a company that takes into account all of its stakeholders (shareholders of course, but also employees, clients, suppliers, the environment...) into its business model, will be able to create sustainable value that will benefit for all, including shareholders. For instance, if a company is able to sustainably attract and retain its employees (training programs, work-life balance, fair remuneration, no discrimination...) this will improve their engagement with the company, driving up self-productivity, better margins and ultimately improving stock performance.

 

Download the full interview along with other industry leader interviews by clicking here.

 

Sonia Fasolo will be sharing further insights at the Sustainable Investment Forum Europe 2020, organised in Partnership with UNEP-FI, to an audience of 400 asset owners, ratings agencies, banks, UN and Government policymakers, investors, development banks, think tanks, and NGOs committed to driving forward the sustainable finance agenda. Find out more here about the event here.