Fidelity Investments has just launched an open architecture technology solution to help RIAsengage with clients about environmental, social and governance investing andcreate ESG-focused portfolios.
The product, known as ESG Pro, “gives
advisors everything they need to get
started with ESG in one streamlined solu-
tion,” said Rick Smyers, managing direc-
tor at Fidelity Labs, the firm’s internal
fintech incubator, in a statement. “It pro-
vides advisors with tools to deepen their
relationships with existing clients — and
engage prospective clients — by develop-
ing sophisticated investment strategies
that align with clients’ distinct values.”
Smyers explained to Investment
Advisor that Fidelity saw data “about
the vast majority of end clients inter-
ested in ESG … and plenty of product
out there [but] advisors hesitant to get
involved. Advisors are the missing link.
“We think the industry is at an inflec-
tion point,” added Smyers. “We’re hop-
ing that tools like ESG Pro will help
make it [ESG] more mainstream. If you
make it easy, it will grow.”
ESG Pro has two components: the
client engagement side, which helps
advisors discuss ESG investing with cli-
ents, and the portfolio side, which helps
advisors create ESG portfolios and com-
pare current portfolios to ESG models
The client engagement capabilitystarts with a white-labeled client questionnaire to help advisors understandtheir clients’ thinking about ESG factors. It also includes customized white-labeled client reports that show how aclient’s ESG portfolio performs according to 24 ESG characteristics.
The portfolio component offers manycapabilities: active and passive preload-ed ESG models from a variety of assetmanagers, ESG data and financial characteristics to help advisors align theirinvesting strategy with clients’ values,and research on thousands of mutualfunds and ETFs, including over 100 ESGfunds and ETFs.
SEC CREATES NEW SENIOR ROLE
FOCUSED ON CLIMATE CHANGE, ESG
In yet another sign of the growingimportance of ESG factors in investing, the Securities and ExchangeCommission has created a new positionin the office of the Chairman that isfocused on those issues. Satyam Khanna,a former senior legal counsel to formerSEC Commissioner Robert Jackson, wasappointed to the role.
As the senior policy advisor for climate and ESG, Khanna will advise theagency on ESG matters and advancerelated new initiatives across its officesand divisions, according to the SEC.
He was most recently a resident fel-
low at NYU School of Law’s Institute for
Corporate Governance and Finance and
a member of the Biden-Harris transition
review team for the Federal Reserve and
banking and securities regulators, includ-
ing the SEC. Gary Gensler, President
Joe Biden’s pick to head the SEC, had
chaired that transition review team.
Khanna also previously served onthe SEC’s Investor Advisory Committeeand was a member of the committee’sMember of the Investor-As-Ownersubcommittee. Earlier, he was an advisor to the Principles for ResponsibleInvestment, which is dedicated tounderstanding the investment implications of ESG factors and supportinginvestors in incorporating ESG factorsinto their investment decisions.
“I am thrilled that Satyam is returning
to the SEC to oversee and coordinate the
agency’s efforts related to climate risk and
other ESG developments, issues of great
significance to investors and the capi-
tal markets,” said Acting Chair Allison
Herren Lee in a statement. “Having a
dedicated advisor on these issues will
allow us to look broadly at how they
intersect with our regulatory framework
across our offices and divisions.”
Lee has stressed in recent speeches
the growing need for “uniform, consis-
tent and reliable disclosure” about cli-
mate change risk from public companies.
Steven M. Rothstein, managingdirector of the Ceres Accelerator forSustainable Capital Markets, notedon the organization’s website and ina tweet that the SEC’s new position is“a critical step forward on the path tomandating climate risk disclosure andaddressing climate change as a systemicfinancial risk.”
Bernice Napach can be reached email@example.com.
ESG HORIZONSBy Bernice Napach
Fidelity Launches ESG Tech Solution for AdvisorsAlso, the SEC has created a new position focused on advising the agencyabout ESG and climate change issues.