BNP Paribas AM European Distribution Head on being “boldly consistent” on ESG

This year offers a chance for active management to shine as scrutiny on ESG grows, says the Head of Distribution for Europe at BNP Paribas Asset Management (BNPP AM).

In January 2022, Roger Miners (who is also the UK CEO of the business) moved from his role as Global CMO to the firm’s Head of Distribution in Europe.

Coming into the position there was a clear strategy in place to integrate the firm’s European operations, which were previously divided into southern and northern. He says the role is a shift to more day-to-day sales pipeline management from the strategic brand transformation he had effected as Global CMO.

Roger says that in retrospect there were a number of “unknown unknowns” ahead in 2022, such as the war in Ukraine, inflation, lockdown in China and supply chain issues. All of this compounded into what Roger calls “an extraordinary year to take on a new role”, and an “incredibly intense” period.

However, he says that these challenges also presented an opportunity.

“I’m a great believer that when times are tough, that’s when you can have a real impact with clients. They remember who stood by them in times of need.”

Looking over the year, Roger notes that using the 60-40 portfolio as an indicator, the year was the one of the worst in over 30 years for the industry. BNPP AM remained net positive in its growing ETF, private assets and liquidity solutions businesses.

Roger says he was particularly pleased with how the team worked closely together to achieve this result.

“You can’t get rid of the natural tensions between investments and sales, but the difference between good and great is taking those natural tensions and making them constructive not destructive.

“You can achieve that by putting the client at the centre.”

A lot of his focus has been building on key strategies, including fixed income and money markets. This comes as what he describes as “the era of free money comes to an end” offers new competition to the asset management industry.

“There is a new competitor in town – it’s cash.

“We can all put money into cash and get a decent return.”

He adds that BNP Paribas AM has some leading money market funds, such as the third largest Euro fund in the marketplace and dollar funds with assets totalling $8billion.

An opportunity for active management

This environment offers “the opportunity for active management to shine through.

“I think 2023 will be one of those years where there’s a huge opportunity to select in an active way the strong performers.”

The firm is also focusing on China equities as well as thematic investments around technology and of course, the energy transition.

The strapline ‘the sustainable investor for a changing world’ shows the importance of ESG to BNP Paribas AM. Roger says the “the” at the beginning is the key word.

“Five years ago that felt bold. It’s trickier when everyone’s jumping on the bandwagon. How do you stand out when everyone’s claiming it?”

He argues that clients can tell the difference between companies putting ESG at the heart of their business and those which are ticking a box. This point is easier to get across in direct conversations than through marketing efforts, he adds.

In recent months, Roger says there has been a growing opportunity here as pressure increases.

“There’s a real focus now on the details and claims.”

He adds another term to the now commonplace ‘greenwashing’ – ‘greenhushing’.

“[There are] parts of the industry that are not willing to talk about ESG or are trying to play it two ways.

“For good or bad, it’s the heart of who we are.”

This unequivocal backing of ESG comes as some asset managers find themselves under attack from both sides of the political divide over ESG. At the World Economic Forum in Davos, BlackRock CEO Larry Fink lamented the backlash in the US against ESG, which he said has become “ugly” and “personal”.

Roger talks about the importance of being “boldly consistent” in terms of messaging about ESG.

“Just when we’re getting bored of repeating the same things is when it’s just beginning to land.”

Roger argues that when companies are being challenged, those with real commitment will stand firm. Ultimately it is about what the firm is rather than what it says.

“With great asset management firms, you go somewhere when you think of them. With [BNPP AM] we want people to think ‘those are the sustainable investment people’.”

He notes the importance of putting sustainability in the strapline, the second most valuable piece of brand real estate the company has, as well as evidencing ESG activities with the use of data.

From the European perspective, Roger says sustainability remains high on the agenda, particularly in terms of helping clients on the regulatory journey through SFDR.

Increasingly, impact is seen as part of the fiduciary duty alongside risk and reward.

“A lot of the investors to invest with us are thinking about the long term. Many of those quite rightly expect to have strong investment returns and expect that we’re not destroying the planet along the way for future generations.”

The 2023 marketing mix

In the current environment, Roger argues that bottom of the funnel activities are most important.

“We’re in the business of trust – people are looking to trust their future and dreams to us, whether it’s the quality of lifestyle they had hoped for in retirement or saving to put towards their children’s educational needs.”

Trust is especially vital – which is why events are key.

“There’s no better way of having trust than meeting face to face. It’s one of the most important things we’ve got, particularly after a period where we couldn’t do them.”

It will be extremely important to prioritise this year, as the industry will have constrained resources and cost pressures.

“However well you’ve done with your sales teams in winning net new assets, assets under management are largely down and as an asset management firm we earn our revenues from our assets under management. There are those cost pressures so we’ll have to be very selective.”

As former Global CMO and now-Head of Distribution, Roger says he has a huge opportunity to make sure sales and marketing are working hand in hand.

In particular, he says it is crucial to bring the data from marketing efforts to bear on sales. In particular, it’s important to use engagement scores based on clients opening emails or engaging with content to guide those conversations and use better targeting.