Episode 227: PanAgora Asset Management on ESG

George Mussalli, chief investment officer of equity investments at the firm, and Mike Chen, the firm’s director of portfolio management and sustainable investing, joined the Waters Wavelength Podcast to talk about a range of topics relating to ESG. Innovation Exchange: Mike Chen will be a speaker at this year’s Innovation Exchange, a virtual conference that will be held from March 22-25. To listen to Chen’s panel discussion and others, you can register here: https://events.waterstechnology.com/innovation-exchange-tech/register-now?form_track=podcast 2:00 To start, George and Mike give background on PanAgora and the firm’s ultimate investment strategy. 6:00 Mike explains what ESG means to PanAgora. 9:00 George lays out the ultimate investment objective for a chief investment officer when incorporating ESG into a portfolio. 15:00 Let’s get hypothetical: A company is extremely climate efficient and has extremely high employee satisfaction, but they have terrible board diversity and make monetary contributions to organizations that are deemed poor when it comes to social justice issues—do you ditch that company even if it’s producing solid returns? How do you build a flexible framework to adjust an ESG portfolio easily? 23:00 Mike and George talk about how the firm builds predictive and forward-looking models in nature, even if the data tends to be point-in-time. 29:00 Mike drills into avoiding data bias in the ESG space. 35:00 George explains how ESG metrics fared under the strain of the pandemic. 36:00 Mike says greenwashing is the greatest challenge facing the ESG space as we head on into 2021 and beyond.