This week we spoke to Quintin Rayer, P1’s Head of Research & Ethical Investing; here’s what he had to say.
What was your journey to P1?
In Guernsey I’d been working in a quant role in fund analysis and selection for a large multinational bank but had wanted to follow up my interest in sustainable investment (which ties back to my atmospheric physics studies at Oxford). I’d completed a sustainable investing qualification before leaving Guernsey, and when we came to the UK, we wanted to be in the southwest (Jo and I both had family connections). I found P1 through the CISI, for which I’d been an author for several years. What P1 let me do (thank you to James) was develop an ethical and sustainable investing proposition “as it should be done”.
What exactly do you do at P1?
In terms of ethical and sustainable investing (ESI):
I developed (and continue to develop) the ESI processes and policies we use to select funds (and other investments) to ensure they have the most robust ESI policies. As part of this, I set up our External Ethical Oversight committee and interact with them on defining issues and developing P1’s response. I look to protect our clients from “greenwashed” ES investments and I spend a lot of time examining aspects of ESI to make them as rigorous as possible, within commercial constraints.
Day to day, I assess fund managers that claim to be “responsible”, “sustainable”, or “ethical” to determine whether they are good enough to be in our portfolios. For slightly different asset classes (e.g., forestry) I have to determine what a high standard of ethical/ sustainable means – not just taking managers’ word for it. Even for areas like renewables, which may seem more straightforward, I must ask what good-quality renewable energy really means.
I challenge fund managers and positively encourage them to see if their policies can be improved, continuing to push the boundaries of what ESI means. This is in addition to carrying out engagement – systematically questioning fund managers to nudge them in better directions, seeking support for investor letters on plastic pollution, climate, and other issues.
The NZC10 initiative, and the leadership it brings to net-zero investing is another aspect of my role – persuading fund managers they want to sign up to this initiative and developing it in a meaningful way to help protect climate.
Overall, it makes for a role which is, yes, demanding, and challenging, but also varied and creative and very much tied to using investments to achieve something positive in the real world (particularly climate).
What would you see as a success for P1 and yourself?
The above sort of gives it away, influence via financial markets to make the world a better place. For me, investor assets, and scale of P1 is not perhaps primarily a matter of monetary value – yes monetary value matters (we all need to live, and it’s nice when we can live well) – but it’s really that investor assets increase the power of our ethical/ sustainable investments to influence change for the better. It is that ability of P1 to influence change for the better, which I see as the real success for P1, our team, and my role in that. As our influence has increased, I have already been pleasantly surprised at the quiet influence we have been building, making progress on what ethical and sustainable investing should really mean. And, from my perspective, I’d say I’m only just getting started…
Without sounding like sales, how would you summarise what P1 is about from your perspective
Er – I think I’ve probably answered that in the above. Financial markets and investments, when used property have huge potential to do good in the world, which must be encouraged, nurtured even. In this respect, as I have learned more, my own journey, I think my outlook is probably Neo-Aristotelian, and very much against the (often unconsciously and uncritically absorbed) Milton Friedman doctrine that the only “Social Responsibility of Business Is to Increase Its Profits” which is incredibly harmful. Adam Smith’s writings recognised the need for concern for others and the importance of things other than profit. I would suggest that a perspective closer to Aristotle would be that businesses exist to do something useful in society, yes by doing so they can (and should) generate a fair profit (which they need to continue to exist and be useful) – but money cannot be the be and end of all.
If you were stranded on a desert island, which colleague would you hope to be stranded with?
Let’s hope that global warming doesn’t make that more likely – although perhaps that’s somewhat bleak humour. Adrian’s pretty green-fingered when it comes to growing tomatoes, which would definitely be handy on a desert island. I’m keen on my gardening too. We also share a (usually) quiet, dry sense of humour, which might help while waiting for rescue…
What book or Podcast are you listening to/reading right now?
A great read I’ve just finished is Naomi Oreskes and Erik Conway’s recent book “The Big Myth”. It follows on from their earlier “Merchants of Doubt”. Makes so much sense about how the journey developed that has led to climate denial. Even insight as to why the 1946 film “It’s a wonderful life” is so important and still relevant today.
What personal investment, good or bad, have you learnt the most from?
While I won the competition for selecting best performing fund at a previous job in a previous incarnation, I’ve also had stocks in firms that got wound up. Often what you learn from investing is more about yourself and what you really want from your investment, rather than what you think you want. But for a transferrable and recent observation, renewable energy will do as well as any (I won’t say which, and in a sense, it doesn’t matter). Markets can be highly selective in (mis)interpreting factors that can drive a stock price. Of course, in one sense, they’re always right – they say what you can buy/sell a stock for and no point in pretending anything else. But you can see how they can fixate on one aspect of a stock at one time ignoring others, and with no other logic than “sentiment” flip to focus on the previously ignored aspect to neglect the first.
