BankInvest CEO Lars Bo Bertram: Strong Demand Ensures Good Returns on ESG-Compliant Investments

Lars Bo Bertram is excited about the future. He notes that over the past few years retail investors have warmed to products that are fully ESG-compliant: “For more than 13 years, ever since BankInvest signed and implemented the UN-backed Principles for Responsible Investment, we have gradually incorporated the pallet of environmental, social, and governance criteria into our decision-making processes. During most of that time, investors showed scant interest in ESG products. However, some two years ago the sentiment started to change and demand for investment products that meet BankInvest’s strict ESG criteria boomed.”

Bertram argues that the pandemic has proven the value of excellence in corporate governance: “The mitigation of risk constitutes an important, if not crucial, element of ESG. We now see that ESG-compliant companies usually respond better to the emergency and display a far higher level of resilience than those that have largely ignored these standards. If you really think about ESG, you’ll be better prepared to face any crisis.”

The strong demand for ESG investment products has also pushed up the stock price of compliant corporations: “Returns show that adherence to ESG standards does not negatively affect profitability.”

BankInvest was set up more than fifty years ago by small- and medium-sized Danish banks to develop and manage a broad range of investment products. “We are still 100 percent owned by these banks. Our mission is to design and manage investment products of a quality similar to, or greater than, those offered by our competitors – mostly larger banks,” says Bertram who emphasises that the current low-yield environment calls for excellence and efficiency in fund management: “Over the past years, we have done a lot of work on our cost base. We need to be very cost-effective in order to survive and prosper. Our margins are ok, and our investment products are gaining market share.”

Bertram is especially pleased with the good reception of the new products BankInvest develops for its distributors: “30 percent of our business originates from products that didn’t exist a few years ago. This shows that we are able to respond to market demand. An ECO-labelled global equities fund with a sustainable overlay that we launched last summer has by far become the fastest growing fund in BankInvest’ history.”

The BankInvest CEO prizes the company’s compact size: “To compete with the ‘big boys’ we need to be nimble as an organisation with short lines of communication that connect inhouse expertise and ensure agile yet precise decision-making processes. Whenever needed, we bring in outside experts or enter into partnerships. For example, to design, launch, and manage real estate investment product, BankInvest teamed up with Denmark’s largest pension fund. Thus, we built bridges between users and providers of products. It is what we do – and what we are good at.”