The Association of the Luxembourg Funds Industry (ALFI) has pledged to increase responsible investment in the funds industry to make up 10 percent across the fund centre.
At a press briefing in London, Anouk Agnes, ALFI director of communications and business development, explained that while the current market is made up of 80 percent UCITS funds and 20 percent non-UCITS funds, the optimal balance would be 70 percent UCITS funds, 20 percent of alternative investment and 10 percent of responsible investment.
Responsible funds should be concrete and innovative, with a measurable social or environmental impact.
Agnes said: “The definition of responsible investing is a major obstacle for growth in the sector, because more and more people are speaking about it but not everybody actually really knows what it is about.”
“What we have in mind are funds that invest, according to a pre-defined investment strategy, to create some positive impact. That can be a social impact, for instance reducing poverty, or an environmental or governance impact.”
“Those funds are growing and they cover everything. They could be funds that invest in social housing, fair trade, or microfinance. There is no limit.”
She also outlined the minimal efforts that fund managers can work to simply by choosing to invest in firms that act responsibly; a strategy of making socially responsible investments.
“The aim, here, is not necessarily to create impact for society, but rather to do no harm by investing, and that is a strategy that every mainstream asset manager can apply to a little extent or to a large extent,” she said.
“These are just strategies of filtering your investments. Responsible investing can cover both extremes of the spectrum, those who can do the minimum and those who can do something really different. I think those who do a lot can actually contribute to change the world.”
Camille Thommes, director general of ALFI, added: “Some funds have been doing this for years without making a big fuss about it, but as this concept becomes a discussion point we can positively engage with the asset management industry, making it more widespread and well known.”
