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Two thirds of the companies analysed, (146 out of 220) formally commit as responsible investors, most frequently by signing the Principles for Responsible Investment (PRI) promoted by the United Nations.. In doing so, these companies are committed to positive evolution and progress in this sphere. However, the vast majority of these companies (75%) are failing to translate this commitment into their brand.
“While ESG assets under management are growing, public awareness is on the rise, media volume is burgeoning and regulatory demand increasing, the industry has made little progress in expressing its good ESG-intent through brand” says Jean-François Hirschel, Co-Author of the H&K Responsible Investment Brand Index and CEO of H-Ideas, a company specialised in strategy and positioning in the financial industry.
41% of the asset managers analysed (91) express a Purpose. This demonstrates that reflection is taking place, but the industry doesn’t yet fully deliver what the public is looking for. On a positive note, 29 managers (13%) have a Purpose connected to societal ambitions. Only five managers managed to craft and align a very well-expressed Purpose that clearly goes beyond monetary returns and addresses greater social good.
“So, while public and regulatory pressure and a clear exposure to media is on the rise, there is no apparent traction yet in how asset managers connect their Responsible Investment actions to their brand, and more importantly, to a greater social good – ie their purpose,” explains Markus Kramer, Co-Founder of the H&K Responsible Investment Brand Index, partner at boutique brand consultancy Brand Affairs and author of the “The Guiding Purpose Strategy, A Navigational Code for Brand Growth.”
Only 17% are Avant-Gardists, both committing and projecting their efforts in their brand. These companies have been notified and awarded a special RIBI™ Avant-Gardist™ Logo as a demonstration of appreciation.
Putting this all together, the industry is making slower progress than the level of media noise would indicate. Public pressure to use finance and investment as a lever to create greater societal good will continue to increase. A younger, technology-enabled consumer base is demanding increased responsibility within value chains and across industry sectors.
“The dynamics we observe make the connection between responsible investment and asset manager brands even more meaningful and thus of the utmost strategic importance for any player in the industry. Now in its second year, we find evidence-based confirmation that a methodology such as the Responsible Investment Brand Index is more relevant and timelier than ever” outlines Kramer.
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The H&K Responsible Investment Brand Index (RIBITM) has been developed to find out which asset management companies act as responsible investors and commit to sustainable development to the extent that they put it at the very heart of who they are: ie. in their brand. The index focuses on asset managers active in Europe. It aggregates the analysis of all 220 European asset managers listed in the Investment & Pensions Europe Journal Top 400 ranking as of December 31st, 2018.
The methodology is focused on hard factors such as whether or not a PRI agreement is in place, and soft factors such as evidence of responsible investment visible in a company’s outward facing communications. Key criteria evaluated include a company’s strap line (slogan) and the visible existence of a vision or purpose statement connected to greater social good. The Responsible Investment Brand Index is made up of two ratings, the Commitment-Rating and the Brand-Rating.
Each of these criteria is given a rating from 0 to 5, and the average makes up the “Commitment” rating.
Brand-Rating: The second rating focuses on brand and evaluates the following factors:
The average of these scores makes up the “Brand” rating.
Commitment-Rating and Brand-Rating are then compared to the average 2.5 rating.
Being placed in the top category and rated as an “Avant Gardist” allows eligible companies to use the RIBITM Sign of Achievement in their communication materials. Using the RIBITM Avant GardistTM Sign of Achievement is free of charge and may be integrated in all your communication materials.
Jean-François Hirschel is the founder and CEO of H-IDEAS, a company which aims at re-establishing trust in the financial world. His professional expertise lies in strategically positioning financial services companies at brand and product level. Hirschel has held senior leadership positions at Société Générale and Unigestion. He holds a MSc from EPFL Lausanne, Switzerland, and has profound knowledge and experience in Institutional, Private and Retail Banking & Asset Management.
Markus Kramer is a partner at Brand Affairs, a specialist consultancy with expertise in strategic positioning and brand building. He holds an MBA from the University of Oxford and is a visiting Senior Fellow in Strategic Brand Management at Cass Business School London. The portfolio of brands he works with include companies such as Aston Martin, Harley-Davidson and many more. Kramer is author of the book The Guiding Purpose Strategy, A Navigational Code for Brand Growth.
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