"ESG is often a very lonely place": Q&A with Danielle Welsh-Rose October 2019

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In a highly informative Q&A, with an entertaining finish, Danielle Welsh-Rose talks to Industry Moves about her new role as an ESG investment director with Aberdeen Standard Investments. We ask Danielle to name the biggest ESG issues of our time and, having worked in ESG roles for two decades, the major changes she's observed. She also shares some advice for her younger self and reveals a thing or two that we definitely didn't know about her.

What drew you to this role?

There were a number of pull factors. ASI’s strong commitment to ESG was very attractive, as was the prospect of joining a large and well-established ESG team – there have been very few years over my career where I have not been a sole operator, and ESG is often a very lonely place! The ASI team has a great culture, and this is vital to me. I was also excited at the prospect of joining one of the world’s largest fund managers – the potential to affect positive change is enormous.

"I was also excited at the prospect of joining one of the world’s largest fund managers – the potential to affect positive change is enormous."

How can ESG considerations be advanced in the Asia Pacific region?

I think it is important to recognise that although most of the big thematic ESG issues are universal, the way these issues are experienced and prioritised varies greatly between regions. Successfully advancing ESG considerations in the Asia Pacific region will require a strong and clear articulation of the investment case for ESG, and an approach that looks at which ESG issues are most material for each specific market, industry and company.

"...in some quarters there is still a tendency towards ‘greenwash’ or more recently SDG ‘rainbow washing’."

You’ve been involved in ESG for two decades, what major changes have you observed?

So much has changed, yet I would argue that much is the same. ESG has definitely moved from the fringe to the mainstream, most large super funds and fund managers in developed markets employ ESG specialists, and the understanding of what ESG is has become more sophisticated. In the last few years, we have also seen central banks and regulators discussing ESG risks as potentially financially material, particularly in the case of climate change. However, in some quarters there is still a tendency towards ‘greenwash’ or more recently SDG ‘rainbow washing’. I expect this to change in the next few years as there is increased scrutiny on funds, and an increased demand for quality disclosure.

"Truly diverse teams can ultimately lead to more profitable outcomes. We need to push harder on companies to disclose quality data on diversity – disclosure will lead to change."

What are the biggest ESG issues of our time?

Climate change is the big one. Climate change is an existential threat and a threat multiplier – the physical impacts of climate change such as water scarcity, sea level rise and crop failure exacerbates existing problems like poverty, forced migration, increased risk of political instability and even potentially terrorism. Thinking about climate change solely as an ‘environmental’ issue ignores these complex interdependencies.

Another big issue we are seeing in developed markets is workplace diversity, and this extends way beyond boards. Truly diverse teams can ultimately lead to more profitable outcomes. We need to push harder on companies to disclose quality data on diversity – disclosure will lead to change.

We are also going to be hearing a lot more about modern slavery in supply chains in the coming years as more countries legislate to eliminate slavery.

"ESG is not yet a consideration for all fund managers, yet it should be."

Is ESG (or should it be) a consideration in all investment decisions for fund managers?

ESG is not yet a consideration for all fund managers, yet it should be. ESG issues are financially material issues that are generally unpriced – if fund managers can integrate these issues into the investment decision-making process, it can ultimately lead to better investment outcomes.

Where did you grow up and what was it like?

I grew up in the inner eastern suburbs of Melbourne. It was a pretty relaxed upbringing with lots of sport, time mucking around in the backyard and out on the street with the neighbourhood kids. We had enough time and space to get bored, which helped us make our own fun (the results of which were not always well-received by our parents…).

What advice would you give to your younger self?

Have courage of conviction. Don’t let fear of failure stop you. Wear sunscreen. And try much harder to talk your parents into letting you go to the Guns n Roses gig.

What is something that most people wouldn't know about you?

For better or worse (depending on which family member you ask!) I like to have at least one ‘BHAG’ (Big, Hairy, Audacious Goal) going at any one time… which means I’ve completed iron-distance triathlons, a handful of other ultra-endurance events, (almost) three postgraduate degrees, and travelled to some pretty amazing places. Oh, also I have ‘murderers thumbs’. I will leave you to look that one up…

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