BFP: What do you do?
LW: I am a research analyst at Nikko Asset Management (Nikko AM), a global firm with over $154 billion of assets under management, focusing on Latin American economics and Impact Investment globally in the Fixed Income team.
In collaboration with the World Bank, Nikko AM has set up funds to invest in so-called “green bonds” issued by the World Bank to finance projects that help reduce carbon emissions and/or help low-income communities alleviate adverse consequences of climate change in both emerging and developed countries. To date, such projects range from eco-farming in China, sustainable water management in Tunisia, to addressing deforestation in Mexico. Another significant benefit of the green bonds is that they offer the investor a choice – often investors have little knowledge or influence on how the bond issuer uses proceeds, whereas with the green bonds the World Bank is transparent on the types of projects it fundraises for. This is a significant step as borrowers in bond markets do not generally like to be tied or restricted to financing specific projects. The Nikko AM World Bank Green Bond funds are also unique in offering a mainstream product to retail customers interested in seeking a market-comparable financial return whilst contributing towards climate-change mitigation. The funds won the TBLI ESG Leaders 2010 Most Innovative Development in ESG Award.
As the Europe representative of the Nikko AM Global Environmental Social Governance (ESG) Forum, I also work to increase our firm engagement in ESG and impact investing and look to expand our activity in green investing to other impact themes addressing bottom of the pyramid challenges.
In my spare time I also co-run Women Advancing Microfinance UK (WAM UK), one of fourteen WAM networks globally. WAM UK works to advance and support women working and interested in financial inclusion and microfinance through networking and volunteering opportunities. Amongst many notable events, this year, we had the privilege of celebrating International Women’s Day with Professor Muhammad Yunus, who presented the Grameen UK initiative, and explained why microfinance can be an important tool against poverty in the UK. I regularly blog for WAM UK if you’d like to find out more about us, or follow me on twitter @lisavwong for more general information on sustainability issues.
BFP: What is the best part about your job?
LW: Traditionally, ESG and responsible investment have been synonymous with equity investments. However, the global fixed income market is almost double the size of listed equity markets, which suggests that there remains a large pool of relatively untapped potential to grow responsible or impact investment – which I find deeply motivating. I constantly work with and meet people with different investment objectives, from solely financial return orientated to completely impact-driven and I am thus lucky enough to be constantly challenged on how I think about responsible investing.
BFP: What have been your greatest challenges?
LW: The best part of the job is also the greatest challenge: responsible or impact investing remains only a small fraction of global bond markets. Working on how best to engage others and invest for financial return and positive impact, appropriate to the investors and end-beneficiaries involved, is a tough nut to crack. Although I am strong advocate for more responsible capital markets and the role of impact investment within that, I also strongly believe in the transformative power of philanthropy and that both charity and investment have significant roles to play in addressing the problems of our world today.
BFP: How have you overcome these challenges? / What advice, would you give to others?
LW: Think big, but be as pragmatic as you can. I am a believer in building on small wins and doing as much as you can with what is available to you to meet larger goals. If you would like to be working in a more sustainable capacity then take action on that – perhaps you work for a firm that is not aligned with your own values but include it into your work to the best of your ability. For example, if you are in an investment research team in an organisation that does not have ESG filters in place could you introduce it into your work, and then perhaps encourage others to do the same? Or perhaps you could share your financial skills with a social enterprise or charity to foster sustainability outside your work place. Building consistency and track record is crucial to your own thought process and ability to reach more ambitious goals, such as designing an innovative impact investment product to address a global health challenge. It’s also easier if you work with others, be receptive to new ideas and try to collaborate where possible.
BFP: If someone wants to do what you do, where should they start?
LW: Develop understanding of both financial and impact investing – you need both. It may be that you have to focus on one area at a time and build up professional experience in each, but it is the ability to look at investment from both lenses that will grow responsible capital markets. Volunteering is also a great way to build up your skills and share what you have with causes you believe in; networks such as WAM UK and Finance Matters, both based in London, are useful for that. There are also great resources on the web such as the GIIN and books on responsible capital, for example, Impact Investingby Anthony Bugg-Levine and Jed Emerson.
BFP: Finally, what do you hope to get out of being part of the BFP community?
LW: I’m particularly focused on how debt markets can play a larger role in addressing our development and climate challenges, so please reach out if you have any thoughts on the matter. Above all, I hope to connect with like-minded people and share information on market-solutions to poverty and climate change. If you’re interested in microfinance and financial inclusion and based in the UK, I’d also likely to warmly invite you to join some of our WAM UK events. Please email us on [email protected] for more information.
Thank you to Lisa Wong for taking the time to do this interview.
Read previous Member of the Week interviews here.