At the last Outlook 2023 organized by Barclays Private Bank Monaco, Mr Jean Castellini, Minister of Finance and Economy made an inspiring speech in front of a large HNWI assembly, on sustainable investing, which both enlighted participants on the investment strategy of the Constitutional Reserve Fund and more largely on benefits of acting as a responsible investor.
“The Constitutional Reserve Fund that we supervise at the Ministry of Finance and Economy has been at the forefront of sustainable investing. We have been investing for over 20 years in investment solutions and funds that pursue such goals.
“We have reinforced the amount invested in sustainable products over the last 5-6 years,
and it has now become as important for us to look at sustainability as it has been to look at performance or volatility.
“We have to show to the professionals that we are serious about sustainability. We truly mean it : as the saying goes “We put our money where our mouth is”!
And this is exactly what we have done .
Now over half of our investments (either traditional, such as 60/40 balanced equity/FT funds, or the more innovative ones) follow sustainable strategies.
“I would add : the sky is the limit, as we set ourselves no specific target.
We may well reach 100% one day, why not?”
Sustainable investing
Listening to Clients
“The people I could refer to as “my clients” are investment professionals, banks, asset managers in the Principality, and the people attending this event are the clients of my clients.
“We all need to have similar goals and to speak the same language.
We must be convinced that through our investments we can make a difference.
“In many cases it is now the younger generations that lead those efforts.
And not only should we listen to our clients but we should also listen to our children.
“There is no planet B, and thus there is no plan B. Despite current market turbulences we should all be aware that long term vision is the key to make sure that we achieve our goals in a context of sustainability.
“If I may be blunt, when I look at some investments we made, I don’t really mind if there is fundamental research demonstrating that sustainability brings alpha.
As a long term investor, I should not look too much at short term volatility and ask myself if it paid off to invest in a more sustainable way.
Again this is not the question !
“The point is, there is no reason why the people in this room, as clients, would not dedicate more of their money to sustainable investment.
Because long term it is what will drive the world economy, and economy is what drives social progress, and at the end that will drive positive excess financial returns.”
Sustainable investing
Being Inclusive
“Let’s not forget also that in the acronym ESG, you have an S and a G as well.
Investments have to be more inclusive in terms of society, in terms of governance, caring for minorities, making sure women don’t hit the so-called “glass ceiling” and can contribute to investments decisions or occupy board level positions the same way as men.
“Inclusiveness is very dear to the way we approach sustainable finance and ESG in general in our initiative – Monaco Finance Durable.
“We are trying to make sure that scientists are contributing to the global impetus, that the Mission for Energy Transition – MTE (another arm of the Monegasque government) is also part of the commitment, that the Foundation of our Sovereign Prince is involved.
“These efforts should be part of a bigger picture, with a feel that a whole community is behind them when it comes to investing in a more sustainable way and to make sure we all implement sustainable investment solutions going forward.”
Sustainable investing