Page 18 - Investment Advisor March 2021

ESG HORIZONS

By Bernice Napach

Fidelity Launches ESG Tech Solution for Advisors

Also, the SEC has created a new position focused on advising the agency
about ESG and climate change issues.

idelity Investments has just review team for the Federal Reserve and
launched an open architecture banking and securities regulators, includ-
Ftechnology solution to help RIAs ing the SEC. Gary Gensler, President
engage with clients about environmen- Joe Biden’s pick to head the SEC, had
tal, social and governance investing and chaired that transition review team.
create ESG-focused portfolios. Khanna also previously served on
The product, known as ESG Pro, “gives the SEC’s Investor Advisory Committee
advisors everything they need to get and was a member of the committee’s
started with ESG in one streamlined solu- Member of the Investor-As-Owner
tion,” said Rick Smyers, managing direc- subcommittee. Earlier, he was an advi-
tor at Fidelity Labs, the firm’s internal sor to the Principles for Responsible
fintech incubator, in a statement. “It pro- Investment, which is dedicated to
vides advisors with tools to deepen their understanding the investment impli-
relationships with existing clients — and The portfolio component offers many cations of ESG factors and supporting
engage prospective clients — by develop- capabilities: active and passive preload- investors in incorporating ESG factors
ing sophisticated investment strategies ed ESG models from a variety of asset into their investment decisions.
that align with clients’ distinct values.” managers, ESG data and financial char- “I am thrilled that Satyam is returning
Smyers explained to Investment acteristics to help advisors align their to the SEC to oversee and coordinate the
Advisor that Fidelity saw data “about investing strategy with clients’ values, agency’s efforts related to climate risk and
the vast majority of end clients inter- and research on thousands of mutual other ESG developments, issues of great
ested in ESG … and plenty of product funds and ETFs, including over 100 ESG significance to investors and the capi-
out there [but] advisors hesitant to get funds and ETFs. tal markets,” said Acting Chair Allison
involved. Advisors are the missing link. Herren Lee in a statement. “Having a
“We think the industry is at an inflec- SEC CREATES NEW SENIOR ROLE dedicated advisor on these issues will
tion point,” added Smyers. “We’re hop- FOCUSED ON CLIMATE CHANGE, ESG allow us to look broadly at how they
ing that tools like ESG Pro will help In yet another sign of the growing intersect with our regulatory framework
make it [ESG] more mainstream. If you importance of ESG factors in invest- across our offices and divisions.”
make it easy, it will grow.” ing, the Securities and Exchange Lee has stressed in recent speeches
ESG Pro has two components: the Commission has created a new position the growing need for “uniform, consis-
client engagement side, which helps in the office of the Chairman that is tent and reliable disclosure” about cli-
advisors discuss ESG investing with cli- focused on those issues. Satyam Khanna, mate change risk from public companies.
ents, and the portfolio side, which helps a former senior legal counsel to former Steven M. Rothstein, managing
advisors create ESG portfolios and com- SEC Commissioner Robert Jackson, was director of the Ceres Accelerator for
pare current portfolios to ESG models appointed to the role. Sustainable Capital Markets, noted
and more. As the senior policy advisor for cli- on the organization’s website and in
The client engagement capability mate and ESG, Khanna will advise the a tweet that the SEC’s new position is
starts with a white-labeled client ques- agency on ESG matters and advance “a critical step forward on the path to
tionnaire to help advisors understand related new initiatives across its offices mandating climate risk disclosure and
their clients’ thinking about ESG fac- and divisions, according to the SEC. addressing climate change as a systemic Sundry Photography/Shutterstock
tors. It also includes customized white- He was most recently a resident fel- financial risk.”
labeled client reports that show how a low at NYU School of Law’s Institute for
client’s ESG portfolio performs accord- Corporate Governance and Finance and Bernice Napach can be reached at
ing to 24 ESG characteristics. a member of the Biden-Harris transition [email protected].

16 INVESTMENT ADVISOR MARCH 2021 | ThinkAdvisor.com