Hirschel and Kramer (H&K) Responsible Investment Brand Index™ 2021

Asset Managers must emphasise their role in the construction of a fairer and safer future.

Responsible Investment Brand Index™ 2021

  • RIBI™ 2021 expands its universe of evaluated companies to 500+ asset managers globally.

  • While industry players overall are making great strides embedding ESG not just into their products, but also into their brands, the disparity across regions is worrying.

  • Nearly half of all asset managers express a reason for being (‘Purpose’), but few do so succinctly and less than one quarter link it to advancing society.

The asset management industry is facing a paradox: there is a strong compulsion to see the industry fully endorsing its societal responsibility and acting for a safer, fairer future, while at the same time financial returns seem to be disconnected from economic reality. The global, underlying forces that shape this dynamic are far reaching and have tremendous implications. To capture and reflect the nature of the undercurrents at play, and for the first time since its inception in 2017, the Hirschel & Kramer Responsible Investment Brand Index (in short RIBI™) adopts a worldwide perspective on the industry.  In expanding its universe of companies analysed globally to 500+, it firmly establishes itself as an indispensable industry tool.

RIBI™ remains the only instrument which evaluates the asset management industry on its ability to translate commitment to sustainable development into each asset manager’s core brand. The index offers unique insights as it evaluates actual commitment against follow-through in brand architecture.

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The 2021 RIBI delivers Insights to help shape your Responsible Investment strategy. Access unique qualitative insights beyond the usual figures.

By combining hard and soft factors, the 2021 Responsible Investment Brand Index reaches beyond figures by providing you with relevant insights into the ESG landscape.

  • Degree of commitment to responsible investment
  • Degree of sustainability embodied within brand identity
  • Value based consistency of communication
  • Articulation of a purpose contributing to greater societal good

The RIBI is an invaluable tool to identify potential gaps between your Responsible Investment strategy and your brand and market position.

KEY POINTS AND NEW IN 2021

  • Universe expansion to 500+ asset managers globally based on Investment & Pensions Europe Top 500.
  • A global perspective with region-by-region analysis of RIBI showing the comparative attitude towards Responsible Investment across regions and within each region.

We congratulate the TOP 10 achievers in the 2021 RIBI™ Avant Gardist Category

  1. Federated Hermes International
  2. AXA Investment Managers
  3. Schroders
  4. Candriam
  5. NN Investment Partners
  6. DPAM
  7. Mirova
  8. Etica SGR
  9. BNP Paribas Asset Management
  10. Sycomore Asset Management
Avant-Gardist-star

While equity markets have yielded healthy post-pandemic returns for investors, many of the underlying fundamental macro factors have not kept up pace. Some call it de-coupling from reality, others call it the great reset.

While 40% of the universe analysed demonstrates above average Commitment ratings, only 25% of the industry has an above average Brand rating. Clearly, in general asset managers first implement their Responsible Investment strategy, then project their efforts in their brand. This is a trend we welcome, as a brand is more solidly anchored in a sound company strategy.

“The understanding of the critical role Purpose plays in an increasingly complex and accelerated, inter-connected world is not equally present across regions. Purpose acts as a unifying force, aligning belief and value systems within organisations and consequently catalyses consistency and growth from within,” says Markus Kramer, Co-Founder of the Responsible Investment Brand Index.

Incorporating ESG into strategy and expressing it through the brand varies greatly

category-ranking-2021

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While industry players overall are making great strides embedding ESG not just into their products, but also into their brands, the disparity across regions is worrying.

At first glance, the 2021 results indicate a ‘one step forward, two steps back’ dynamic for the industry, with the top level RIBI dimensions reversing quite significantly. (Commitment: 1.84 vs 2.19 last year; Brand 1.59 vs 1.72. Both ratings work on a 5-point scale, with 5 representing the best score - please refer to our evaluation methodology at the end of this document for more details).

However, the emerging picture is a lot more nuanced and offers more than a glimmer for hope – and with Europe leading the way. For example, the number of European managers linking their core reason for existing (Purpose) is much more often anchored in how this links to a value system that drives organisational culture – and advances society. Already a quarter of these European managers also link their Purpose to such noble ambitions, up nearly 6% from last year (19%). This is in stark contrast to the North American region, where an equal number of companies (nearly half) state a Purpose, but less than two in 10 managers (17%) have made the link to connecting their ambitions to societal goals. Given this is the largest region in terms of both players as well as total Assets under Management, the overall impact on this year’s RIBI score has been negative (see further below for detailed regional analysis).
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Regional Overview

Europe is on a path of continued improvement within RIBI

The European asset management industry is on a steady path of improvement, with the Avant-Gardists now representing 24% - almost a quarter of the players (vs. 19% last year on equivalent parameters). Also, the number of Traditionalists is on the increase, from 28% to 32%. Both these moves have the positive consequence that Laggards decrease from almost half of the companies evaluated, to less than 40%.
RIBI 2021 vs 2020 and 2019

Asset managers have a vital role in shaping our collective future.

Despite an apparent ‘global divide’, we believe there are plenty of positive signs that in aggregate can genuinely be taken as positive markers of change, rooted in an increased consciousness when it comes to investing money. We are encouraged to see that investors, society, and regulators are continuing to adopt a broader perspective as to how the leverage of money can be more effectively balanced towards creating better futures for everyone. 

So how can asset managers take advantage of our findings here?
Firstly, by genuinely building Purpose and value-driven cultures from within that will help them to nurture talent, to innovate and to create solutions that ultimately will advance them, their investors and the planet for the better. Secondly, by demonstrating their positive actions and communicating these through their brands to the world at large, thus acting as a catalyst for good deeds, and showcasing an industry that plays its part in the master plan of building a better world.

Jean-François Hirschel, Co-Founder of the Responsible Investment Brand Index, adds: “While we do observe a divide within RIBI across the global regions, the main challenge the financial industry needs to address is its reputation – the need to establish long-term, trusted, and mutually profitable relationships with multiple stakeholders. Asset managers are increasingly in the spotlight and focus on the connection between the financial industry and its societal responsibility through a genuinely expressed brand is a powerful way to achieve this.”

LEVERAGE THE RESPONSIBLE INVESTMENT INDEX TO YOUR ADVANTAGE

For asset managers:

RIBI 2021

Extensive research results, with insights on the evolution of the overall industry. Detailed dissection of the performance of all key players in the RIBI segments. New this year: global perspectives, including a competitive overview with the rankings of the Top-10 on a per-country basis within global regions and countries.

Free immediate download.

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RIBI +

Full RIBI Report plus a dedicated section for you with Your Category, Your Commitment Rating, Your Brand Rating, a view how on you rank globally as well as a comparison within your home region or country. Delivery time is 5 working days.

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INSIGHTS +

Extensive research results, with detailed insights on the evolution of your company. A qualitative assessment of your evolution and a direct comparison of your position vs peers on each of the 15 analysed criteria (Commitment + Branding). A detailed rating of the quality of your Purpose and Values as well as recommendations for action. This includes tailored preparation, and report as well as a debriefing call. Delivery time is 10 working days.

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DEEP DIVE

You get all tailored services from the INSIGHTS+ report as well as an analysis of your company compared to  specific peer universes defined with you: by country and/or by size and/or by type of organisation, aligned with the strategy of your firm. This is presented in a  dedicated workshop with your team (virtual or on-site), moderated by the RIBI’s two authors. This includes an in-depth preparation briefing call to customise the workshop to your needs, as well as a followed-up with concrete recommendations that you can use for your Responsible Investment and Brand strategy.

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We provide tailor-made services. If you are interested in being assessed on the RIBI methodology but are not part of the IPE Top 500 ranking, please contact us.

For asset owners, fund selectors and investment consultants:

RIBI 2021

Extensive research results with insights on the evolution of the overall industry. Detailed dissection of the performance of all key players in the RIBI segments. New this year: includes a competitive overview with the rankings of the Top-10 on a per-country basis within global regions and countries.

Free immediate download.

Order

INSIGHTS +, Single manager

Extensive research results with detailed insights on the evolution of an asset manager of your choice. A direct comparison of their position vs peers on each of the 15 criteria analysed (Commitment + Branding). A detailed analysis and interpretation of what it means for you.

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INSIGHTS +, Multiple manager

Receive INSIGHTS+ reports for several managers, for example, all those who manage for you, or all those in a specific country / region. Comparative analysis between each of the managers in the selected sample is provided and evaluated for you.

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Use of RIBI Sign of Achievement (if eligible)

Being placed in the top category and rated as an “Avant Gardist” allows eligible companies to use the RIBI™ Sign of Achievement in their communication materials. Using the RIBI™ Avant Gardist™ Sign of Achievement is subject to an annual licencing fee of EUR 1.000. Please contact us.

Avant-Gardist-star

About the Index

The H&K Responsible Investment Brand Index (RIBI™) identifies 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: i.e. in their brand. The index focuses on asset managers active in Europe. It aggregates the analysis of all 500+ European asset managers listed in the Investment & Pensions Europe Journal Top 500 ranking as of December 31st, 2020.

Methodology Overview

The H&K Responsible Investment Brand Index is made up of two ratings: the Commitment rating which focuses on hard factors (eg level and quality of Listed Equity voting), and the Brand rating which focuses on soft factors (eg the existence of a Purpose statement and the quality of its expression). Each of these two ratings ranges from 0 (poor) to 5 (excellent).

The consistency of what an investment manager commits to in terms of Responsible Investment and how it projects this in its brand is measured via the four RIBI categories:

  • Avant-Gardist: Above average on Commitment rating and Brand rating
  • Traditionalist: Above average on Commitment rating and below average on Brand rating
  • Aspirant: Above average on Brand rating and below average on Commitment rating
  • Laggard: Below average on both ratings
Data required to calculate these ratings is sourced from publicly available information.

Commitment: rating methodology

The Commitment rating is based on seven top-level criteria:
  • Strategy and governance of Responsible Investment.
  • Involvement of the asset manager in collaborative Responsible Investment initiatives.
  • Staff commitment: the number of staff dedicated to Responsible Investment, out of total staff.
  • Listed Equity Engagement: level and quality of engagement with companies.
  • Listed Equity Voting: level and quality of voting.
  • Fixed Income Engagement: level and quality of engagement with issuers.
  • Senior involvement: seniority of the staff involved in the quality control of Responsible Investment reporting.
The information required to evaluate each of these criteria is sourced from the Principles of Responsible Investment Transparency Reports.

Branding: rating methodology

The Branding rating is based on eight criteria:
  • Whether or not the asset manager express a Purpose.
  • Whether or not this Purpose connects with societal goals.
  • Evaluation of the quality of the expression of the Purpose based on five criteria.
  • Whether or not the asset manager has a Values system.
  • Whether or not this Values system connects with societal goals.
  • Evaluation of the quality of the expression of the Values system based on five criteria.
  • Whether or not the asset manager has a strap line which connects with societal ambitions.
  • Whether or not Responsible Investment is mentioned as an objective in the asset manager’s corporate description.

About the Authors

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 Bayes (formerly Cass) Business School London. The portfolio of brands he works with includes companies such as Aston Martin, Harley-Davidson as well as Banks, Asset Managers, Governments and NGOs. Kramer is author of the book The Guiding Purpose Strategy, A Navigational Code for Brand Growth.

Contacts

Jean-François Hirschel
CEO and Founder
H-Ideas S.A.
Rue de la Cité, 1
1204 Geneva, Switzerland

Phone: +41 22 561 84 12
E-mail: [email protected]

Markus Kramer
Managing Partner
Brand Affairs AG
Mühlebachstrasse 8
8008 Zurich, Switzerland

Phone: +41 44 254 80 00
E-mail: [email protected]

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Disclaimer

The authors accept no liability for the content of the data presented in this document, or for the consequences of any actions taken on the basis of the information provided, unless that information is subsequently confirmed in writing. Any views or opinions presented in this analysis are solely those of the authors.

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