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SEI has implemented a Sustainable Investing Solutions Team whose responsibility is to incorporate sustainability or ESG into SEI's investment activities. As a result, SEI supports sustainable cities and communities as well as responsible consumption and production. Many of SEI's financial portfolios are comprised of companies that reinforce these goals, thereby helping create a more socially responsible and environmentally friendly world.
Jana is a part of the Investment Management Unit at SEI. This is where SEI’s asset management activity takes place. Her role was created in 2019 because of the emerging need SEI saw for integrating sustainability into asset management. Sustainable investing solutions have been driven by client demand and changing regulations in Europe and the United Kingdom. Sustainable investing is helping investors incorporate sustainability objectives alongside traditional financial metrics. Jana’s job is focused on investment products and solutions within the sustainability sector. She works with different market units and the investment management unit to help create the resources and capabilities that are needed to support sustainability in their investment products and solutions. Jana also works with legal and compliance to make sure that SEI is addressing the emerging regulations within sustainable investing.
The mission of SEI’s sustainable efforts is to help investors meet or incorporate sustainability objectives with financial metrics to achieve long-term results for their clients. SEI views ESG as a way to bring more information to its investment process to make better decisions and to manage risk as a fiduciary for their clients. SEI also has some clients who are looking to align their portfolios with their mission or core values. Many of these clients are non-profits, universities or religious institutions.
According to Jana, "sustainable investing had been a buzz word in the asset management space for a number of years as it grew its prominence." There have been numerous forces at play causing the shift in the market towards ESG. On one hand, a large share of the demand developed as a result of investors’ heightened sensitivity to matters relating to sustainability (such as climate change). Inquiries from clients about SEI’s approach to sustainability as well as the firm’s specific strategies to tackle ESG became more frequent.
On the other hand, the shift in demand occurred at least in part due to increased regulation of asset managers and investors, especially in the European Union and the UK. Thus, the firm clearly saw a need to "hire someone with expertise in this realm in order to build a team that could develop a sound sustainability strategy with respect to investing." Had the firm chosen not to pour resources into their ESG strategy, it would risk not only future legal and regulatory difficulties, but also the potential of damaging its reputation among clients.
Jana sees the focus on sustainability continue to grow tremendously both within the firm, as well as across the financial services industry as a whole. While she expects her team to expand in terms of size, her greater focus is on growth regarding firm-wide integration of ESG. Considering there are many teams involved in the implementation of ESG at SEI, Jana believes that each of these teams will continue to hire individuals with backgrounds in ESG or develop their own expertise. Doing so will improve the understanding of ESG across the entire company, as well as making the implementation process more seamless.
Jana’s sustainable investment team faces many challenges. First, a large number of teams and individuals are involved in the implementation of ESG at the firm, requiring a tremendous level of “buy-in” from cross-functional groups. Having to coordinate across various different groups puts further emphasis on the need for strong soft skills for anyone working in this area. A technical challenge faced by her team is a lack of sufficient data to utilize in implementing their strategy and meeting regulatory requirements. Jana specifically mentioned the regulations for sustainable investing in the EU, which include requirements to report some data that they have not had to disclose in the past. Thus, dealing with incomplete information can lead to difficulties in client and regulatory reporting. Another important challenge is that regulations change very frequently due to the nature of this novel focus in the financial services sector. This creates a need to balance both the firm’s knowledge and understanding of new regulations as they spring up, as well as how to implement its ESG strategies in the context of such new regulations.
Jana has certainly seen a discernible shift towards ESG in recent years within the industry. When Jana embarked on her career in sustainability fifteen years ago, most individuals in the corporate workforce had no concept of what sustainability or ESG were, as these were not mainstream phrases. Now, nearly all corporations in the United States and abroad have teams of individuals specifically dedicated to ESG. Most of these corporations publish annual sustainability reports demonstrating how they are making progress in their sustainability efforts. There are now more employment opportunities than ever before in ESG, both within the financial sector as well as in various other industries. Firms that are unable to adapt with the times will risk being left behind. Therefore, they must be able to ascertain what societal shifts may impact their business. In this case, sustainability certainly qualifies as one of these societal issues that will have an impact on businesses.
Sustainability efforts have brought reputational and business growth, portfolio performance, and talent management benefits to SEI. SEI believes that if they incorporate sustainability into how investments are selected, their portfolios will do well over time. Clients and prospective clients want to know what the company is doing within investment portfolios, from a sustainable investing perspective, as well as what they are doing internally. Do they have a diverse team, are they taking care of the environment, operating with integrity, and do they work under ethical leadership? People want to know they are doing business with a good company. Investors are increasingly considering how ESG issues affect their investments and how their investments can drive positive impact. An approach to sustainability also helps in client attraction, retention, and talent management. The younger generations want to feel good about the places they work for and to feel assured that their values are being reflected. Sustainability has also impacted the company in a regulatory and legal way, as they are increasingly subjected to disclosing information about the business and its footprint. It is helpful that there is now a team consisting of people with expertise, so they have the right tools in place to meet ongoing needs.
SEI is a company that has to make decisions for clients based on their best interests. Sustainability is linked to this. If one has investments within SEI and they want their money to be secure in the future, they are going to want an organization that is focused on how a broad range of issues can affect portfolios in the long run, including sustainability. Sustainability themes are shaping the future of the global economy and SEI’s role in society functions as a fiduciary, to help people protect their money.
SEI is a service company that does not make physical goods and products, so their physical footprint is generally low. However, as a technology company, they do have an electricity consumption footprint, so they have efforts in place to use less energy. For example, they use energy efficient building management systems and LED lighting, along with a renewable energy credit program to help grow renewable energy generating capacity. The company is seeking opportunities to manage operations efficiently and to minimize emissions and waste.
As a whole, SEI’s incorporation of sustainability has reaped major benefits for society and the environment. By creating portfolios consisting of environmentally friendly companies, the clients are investing their money in firms that are doing good for our world. This is supporting companies who are taking active roles on key issues such as poverty and gender inequality, as well as promoting responsible consumption and climate action. These firms have more efficient supply chains, utilize clean technology, and have limited their carbon footprint. On top of this, they promote waste reduction and the use of recycled materials for production. The portfolios consist of companies who advocate for social change and good, such as human rights. SEI’s purposeful initiatives and commitment to sustainability show their dedication to corporate social responsibility.
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Jana Holt, Global Director, Sustainable Investing Solutions
SEI is a global financial services company that was founded in 1968 and is headquartered in Oaks, Pennsylvania. SEI is a publicly traded company and is listed on the NASDAQ Stock Market. SEI provides platforms, services and infrastructure that helps wealth managers, financial advisors, investment managers, family offices, and institutional and private investors create and manage wealth. They have over $1.2 Trillion dollars in assets under management and administration, with 49 of the top 100 global investment managers and 10 of the top 20 U.S. banks as clients. SEI has 4,700 employees globally in more than 10 offices, including in the U.S., Canada, China, Ireland, England, India, Luxembourg, South Africa, and Switzerland.