LinkedIn Live from #CAIS20: Interview with Bonnie Wongtrakool

March 6, 2020 3:08 pm |

LinkedIn: Welcome back to LinkedIn at the CAIS Alternative Investment Summit, I am Devin Banerjee, LinkedIn’s Senior Financial Services Editor. I am very pleased now to be joined by Bonnie Wongtrakool. She is the Global Head of ESG Investments at Western Asset Management. Bonnie, welcome.

Bonnie Wongtrakool: Thank you.

LinkedIn: So I want to start on that title that I just said and what it means about the industry – the investment management industry – that there are more and more people with the title “Head of ESG.” What does that say about where the mindset is on ESG right now?

Bonnie Wongtrakool: Yeah, well, having a head of ESG has almost become a standard in the industry. If you are a larger asset manager, you need to have that because ESG has become this big, complex movement with a lot of moving pieces that require new resources. And at Western we definitely recognise that; I moved into my role a few years back. We had seen that this movement was growing immensely overseas – specifically within Europe and Australia – and we knew that we needed to formalise our process and build in new pieces into what we were looking at to make this more transparent to investors and make it more valuable to them.

LinkedIn: I want to touch on something you just mentioned which is that this movement took off first across the pond in Europe and also in Australia, even Canada now – all of those places before the US, really, or at least ahead of the US. When you are managing a global portfolio – $460 billion under management at Western – how do you see different nuances and distinctions between how asset owners and even companies approach ESG geographically?

Bonnie Wongtrakool: Well on the asset owners’ side that’s easy, it does seem that the majority, almost all European investors – in fact, I would even go so far as to say all European investors – are basically committed to this. And if they aren’t, European regulations that are coming into effect over the next few years will force them to be, so that’s not an issue there. Whereas in the US you see more concern over things like fiduciary duty, given SEC requirements and the like, people are wondering about the trade-off – they’re more cautious about moving towards that. But with respect to issuers you also see a similar kind of trend where European companies are much more advanced – not just in the language in their communications to investors, but their disclosures, for example – that’s really helpful. And what you see in the third-party ratings is that European companies actually do better because of that disclosure element because third-party ratings rely upon disclosures and the more disclosures you have it’s more likely you’ll be better rated. The US is lagging behind a bit. If you look at the US corporate index, you’ve got a little bit over half of them disclosing their carbon emissions – that’s not great. So there’s a lot of room for improvement there.

Click to watch the full interview between LinkedIn Senior Financial Services Editor Devin Banerjee and Bonnie Wongtrakool, Global Head of ESG Investments at Western Asset Management, from the studio at CAIS20.