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Felipe De La Rosa Chamorro

Degree:

EMBA

Location:

Russia

Industry:

Wealth management

Year:

Jan 2022 - Sept 2024

By Felipe De La Rosa Chamorro

Student views: ESG investing and the importance of the Oxford Executive MBA

Where do you currently work and what does your job involve? What does your company do?

I work for General Invest, a wealth management company headquartered in Luxembourg. Our firm provides comprehensive advice to high-net-worth individuals, creating tailor-made investment strategies and financial planning for each client. As the Chief Investment Officer, I oversee the investment process, making asset allocation and risk management decisions across portfolios.

General Invest is part of Mikro Kapital, one of the leading corporations in the European impact finance space. Therefore, it is paramount for us as wealth managers to achieve sustainable investment returns while promoting environmentally and socially responsible development. Consequently, we ensure that environmental, social, and governance (ESG) criteria are incorporated into our investment process.

Please describe the term ‘ESG investing’

ESG investors take into account in portfolio investment decisions an issuer’s impact on the natural ecosystem (E), relations with the community and employees (S), and the company’s structures in place to act in the best interests of shareholders (G).

Responsible investors seek to generate positive investment returns and benefits for the society. ESG analysis is not new; it is just a systematic complement to traditional fundamental analysis. For our firm, ESG issues remain relevant throughout the investment process, from the initial equity and debt screening to ongoing portfolio management.

 Why is this important for companies?

ESG is important because of investor demands, emerging regulatory requirements, and an increasing focus from the society in general. Consequently, ESG investments will continue to rise. According to Bloomberg Intelligence, global ESG assets are expected to exceed $53 trillion by 2025, representing more than a third of the $140.5 trillion in projected total assets under management.

Therefore, ESG investing is crucial for companies exposed to debt and equity capital markets. In addition, investors are increasingly interested in promoting ESG practices in the companies they fund, either when acquiring stocks or bonds. Therefore, poor management of ESG factors can potentially lead to price volatility, credit rating downgrades, and consequently higher costs of equity and debt for the company.

Consider the example of the BP, one of the business cases we studied in the past module with our EMBA J22 cohort. In 2010, a BP’s oil-drilling platform exploded, killing workers and resulting in a large oil spill. BP’s stock price halved in the aftermath, and the negative impact on financials amounted to several billion dollars. Before this accident, BP had a poor track record of health and safety practices. Therefore, I believe that a higher interest in ESG issues from the company and its shareholders could prevent or limit such disasters.

What do you think about the recent wave of criticism regarding ESG and Greenwashing?

I see the current criticism of ESG as a positive development, as society must demand asset managers to be more transparent on their responsible investment claims. Moreover, the asset management companies should be able to prove how their engagement is causing a positive impact on a specific ESG space. The current criticism is part of the evolution that will result in more transparent and understandable investment products for the end investor.

Standardisation and regulatory consensus about ESG principles are needed in order to avoid greenwashing, similar to what happened with credit ratings in debt capital markets. For instance, the investment industry has created comprehensive standards for illustrating financial performance. I believe similar measures will be made and polished over the time for green credentials disclosure.

The responsible investment sector is evolving, and the term ESG may change to another type of labelling; however, the overall ESG trend will remain. Making the investment industry more transparent and responsible is a question of market evolution. At this stage, for instance, I believe the business case for energy transition and diversity is there, despite the turbulences that arise over time due to geopolitics, macro, and other externalities.

Why did you choose the Oxford Executive MBA?

Oxford offers a best-in-class EMBA curriculum and unique access to business leaders. This is an excellent place to develop an innovative mindset, expand my network, and learn best practices to build a sustainable investment business on a global scale.

The diversity and quality of Oxford’s cohort might help me improve my understanding of the impact of the investment business on our communities and how we can do better in the current challenging times. A key factor driving my decision to study at Oxford was the opportunity to interact with leading companies from different sectors. I want to understand their corporate culture to gain an edge in developing our investment business globally.

Finally yet importantly, Oxford University is a leading institution in ESG research, including studies of its impact on the investment industry. Our investment process requires rigorous fundamental and ESG research. As part of the EMBA program, I have the opportunity to leverage on Oxford University’s demonstrated expertise in analytics and high-quality academic research. I expect this to result in insights that can help me and other asset managers to improve our investment process and make more informed investment decisions.

What have you learned so far during your EMBA modules and have you had a chance to apply your learning yet?

The modules have been very intensive from academic and networking perspectives so far. First, however, I would highlight the discussions with the cohort on business and its impact on societies across the globe. In particular, we had many talks on moral values vs. economic value with people from different backgrounds, having enriching conversations that allowed me to see the same problem from different angles.

What is it like trying to juggle work, personal life and education?

Balancing work, family life, and EMBA studies has been challenging. Nonetheless, I think it is also part of the experience. After a few months into the program, I already feel that I can manage to perform well at work and the EMBA, still having a good balance in my personal life. Moreover, the EMBA allows you to “work hard, play hard”, putting you in a space where you are involved in different exciting social and academic environments and stimulating your development in various aspects of your life.

What is your ultimate long-term professional goal?

In terms of professional goals, one of them is to contribute to expand further the impact finance industry across different markets, including emerging markets like Colombia, where I was born. I believe that responsible investing is in a very early stage of development. There is still a lot of work to be done to create a systematic approach in the ESG investing space. Nevertheless, I think that fund managers can play a crucial role in the ESG value chain, and I plan to be there to ramp up the responsible investing effort.

To find out more about the Oxford Executive MBA:
How to apply
Balancing family life
Scholarships and funding
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