It's time for practical solutions in sustainable finance: In conversation with Justin Kew

In the first of our "In conversation" series, we talk to Justin Kew, who has led ESG roles at major investment firms such as Fidelity International, Carmignac and currently at a global hedge fund. He tells us about his journey so far, and what the investment industry needs to prioritise for meaningful change. Justin is also an Advisory Board member of Impactive.

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Hi Justin, tell us a little about your professional career

My professional career has been quite diverse, and not typical of a traditional ESG professional. I started my career as an engineer after graduating from college, working on refinery sites designing instruments and electrical systems for a UK-based oil and gas company. Seeking a new challenge, I later joined a graduate scheme at an investment bank in London, where I gained experience in trading, business management, and sales.

It wasn't until about 8 years ago, when I was part of a quant equity team, that I was asked by a client to look into ESG. Through my research, I discovered an information inefficiency in the field, which sparked my intellectual curiosity. Since then, I have been working with various firms to build up their ESG capabilities from scratch. This has involved integrating ESG into the entire organisation, from investment research to portfolio construction, product development, communications, and the firm's CSR strategy.

Overall, my diverse range of experiences has given me a unique perspective on ESG, which has been invaluable in my current role as an ESG professional.

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What has been the highlight of your career so far?

The highlight of my career has been the opportunity to contribute to sustainable investing and make a positive impact on the real-world economy. The thought that what I do can actually indirectly make a real-world economy impact has always been an inspiration to me. I am motivated by being able to be part of something much bigger than us. Our work on sustainable investing is not done yet, and we are at a critical point to drive the financial industry to move towards a society that is more inclusive.

Moreover, I find the innovation and critical thinking that is constantly evolving within sustainable finance inspiring. Sustainable finance is not a new topic, but it has received a lot of attention over the last five years because people care about it. We need to work together to innovate while supporting each other.

Each milestone I achieve has been quite satisfying, and it's nice to see the impact of my work on firms. For example, during a recent panel discussion, someone from my previous firm who joined after me talked about what I built there, not knowing that I was the architect behind it. It was incredibly gratifying to hear how my work had impacted the company and its employees.

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Is the nature of hedge fund activity compatible with responsible investment? What about stewardship?

When it comes to hedge fund activity and responsible investment, there are definitely misconceptions. While some hedge funds may focus heavily on quantitative modelling, this is not unique to the industry. In fact, traditional long-only asset managers and passive funds use similar strategies. However, fundamental hedge fund managers have a crucial role to play in responsible investment. During my time in a hedge fund, I saw first-hand how analysts really dug deep into understanding the long-term business strategies of the companies they were investing in. They left no stone unturned and worked tirelessly to understand the company, industry, and value chain. This level of due diligence is required to be successful in investment, and it also means that hedge funds have a deep understanding of the long-term impacts of their investments.

When it comes to stewardship, hedge funds have an important role to play in providing feedback to companies on their business strategies. We spend a lot of time speaking to companies, sharing our views and feedback as companies go through their strategies. At the end of the day, responsible investment is about making a positive impact while generating an attractive return to our end investors, and hedge funds can certainly play a part in that.

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What three things should asset managers be prioritising in 2023 to deliver on stakeholder expectations on ESG?

Firstly, we need to shift our focus from black and white exclusions to transition. Transition is a difficult process, but it's necessary for building a more inclusive society. Secondly, we need to prioritize efficiency in sustainable investing. We have enough technology and innovation in data and platforms that can streamline the ESG process, making it more impactful and cost-efficient. Lastly, stewardship needs to focus on long-term impact, not just short-term success of disclosure and reporting. We need to be patient and put ourselves in the company's shoes to work in partnership with them. Empathy needs to be at the core of stewardship to achieve real-world impact.

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We're glad to have you on our advisory board, what made you decide to get involved with Impactive?

Thank you for the invitation to be part of this exciting company which I'm very excited about. The reason I decided to get involved with Impactive is because I strongly believe in the power of technology to drive efficient and effective sustainable investing. In my previous job, I built a platform that consolidated various ESG datasets onto one platform and I saw firsthand the impact it had on streamlining the ESG integration process. When I learned about Impactive and their mission to build a platform that can facilitate the next evolution of sustainable investing, I knew I had to get involved. I believe that Impactive has the potential to be a game-changer in the industry, and I'm eager to contribute my expertise to help them achieve their goals.

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Describe your perfect day

My perfect day would start with the Elizabeth line running without any delay, as I rely on it for my daily commute.

I enjoy the challenges that come with my job in sustainable finance. I believe that sustainable investing is not just a job but a lifestyle choice, and I am willing to work extensively across evenings and weekends to help achieve my goals.

What would make my day truly perfect, however, is seeing the sustainable investment industry coming together, to be honest about what we stand for, what we can achieve, and how we can work together to achieve our goals. It's time for us to move away from the conference circuit of high-fiving each other and discussing problems with unrealistic solutions. We need practical solutions that can help move civil society, government, companies, and capital markets towards inclusive finance. When we are all working towards this goal, that would truly make for a perfect day.

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