An Interview with Simon Ruddick
Simon Ruddick is the founder and current Chairman of Albourne Partners, a major player in the financial services industry that has been providing research advice on alternative investments since 1994. The combined investments of the firm’s clients now top $500 billion.
As a long-standing supporter of Synchronicity Earth, we asked Simon what lay behind his growing passion for the natural world and his commitment to promoting the urgency of environmental issues within his industry. We also learnt more about what Albourne are doing to promote greater integration of Environmental, Social and Governance criteria in the sector.
JP: How do you think the financial services industry, and Albourne in particular, can drive positive change for nature?
Part of my recent awakening is the realisation that, while I know I can’t do everything about it, I can certainly do something about it. For me it’s about finding the best point of entry to make a difference and clearly, for me, this is in the financial services industry.
At Albourne, we work for the world’s investors, helping them to evaluate investment opportunities in complicated - most people call it alternative – assets i.e. hedge funds, private equity, real estate, infrastructure, venture capital and so on. Our aim is to look after investors and protect their interests. In terms of Environmental, Social and Governance (ESG) issues, we’re fortunate to have a very strong position in the market that we’re in, and we want to harness that strength to have a positive impact in this ESG space. We have publicly committed to putting a huge amount of time, thought and work into ESG and to not charging for the information we provide to our clients on this. We have a document called ‘Core Conscience’ which we use to collect information from all the funds we look at. Any fund manager we interact with is invited to answer a set of questions relating to ESG, which have been distilled by endless conversations with a wide range of our clients who are passionate about the subject. We believe that you can affect change by keeping, collecting and collating a score of what people are doing in terms of ESG.
Looking at Environmental, Social and Governance issues from an investor’s perspective I see three types of people: There are those who are already deeply passionate about the subject, and that’s a minority, albeit a meaningful minority; then there’s another minority at the opposite extreme who, I don’t think, will ever focus on it - not necessarily because they’re entirely without concern but because that is how they interpret their mandate and make organisational decisions. But what is interesting is that the overwhelming majority sit between those two, and that ‘fat middle’ - as opposed to the ‘fat tail’ - are people who are concerned about the environment, and who have stakeholders who are hugely concerned. What holds them back is the fear that accentuating ESG as a priority may impact the choice or diversity of investments that they can look at. I see all kinds of firms out there who absolutely do get it and know they should be doing something, not just for their clients but also for their colleagues. But the caveat to that is a nagging fear that the ratio of talk to action is still unhealthy.
The point about the information we are gathering is that it enables that ‘fat middle’ to become more aware of ESG and start to include it in portfolios. When in time they start to lose their fear of the opportunity cost of making ESG a sort criteria, then many more will formally adopt it. I think there is no doubt that when and to what extent coherent and convincing ESG offerings exist, there will be extraordinary demand for them and that somewhere down the line they will become a must have, rather than a nice to have.
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