Q&A: Paula Singliarova, Head of Sustainability and Stewardship, Arabesque Asset Management
Published 1st June 2022
By Kamogelo Motse, Research Associate, Climate Council
I got to have a chat with Paula Singliarova, Head of Sustainability and Stewardship at Arabesque Asset Management. We spoke about her work in the sustainable finance sector, the investor engagement campaign she ran and the environmental society she founded with her classmates while at University. Paula is passionate about sustainability and believes that we all have a role to play and have the ability to vote with our capital. Enjoy the interview!
What does your job as Head of Stewardship and Sustainability at Arabesque Asset Management entail?
My current focus is on the 2022 Annual General Meeting season, attending engagement meetings and monitor voting. But every day is very different as the sustainability function sits in between investments, business development and strategy. My main responsibilities are overseeing proxy voting and engagement activities, working with the investment team on integration of sustainability scores in the investment process, monitoring latest sustainability news and of course, you can’t escape reporting.
I am part of our sustainability committee, where we look at integration of sustainability in specific investment strategies but also a wider company angle. My work is very hands on, and I am really enjoying it!
When obtaining your Masters of Science, Finance did you know that you wanted to pave your career towards the sustainable finance sector?
Yes, within the first months of my studies I had this “lightbulb moment” realizing that I can combine my personal passion for sustainability with my degree in finance. It seemed like a natural solution to scale up my personal sustainability efforts. Buying a fair-trade coffee, wearing second-hand clothes and cycling to work are all important but we need systematic change to actually move the needle on climate change. The finance sector has an enormous influence over global matters, and it seemed the perfect place to be.
You founded the Environmental Society at Birkbeck University, what was the society’s focuses and why did you think it was important to start such a society?
Birkbeck University was doing a good job in terms of sustainability before the society was founded but we wanted to push the efforts even further. A couple of classmates and myself founded the society and worked with the Sustainability Officer for the university to improve recycling initiatives around plastic waste reduction.
We worked with the catering company running the university’s cantina and coffee shops and managed to get rid of plastic cutlery, refillable bottle stations and negotiate discounts for reusable coffee cups. It was important to formalize the society to promote sustainability agenda on the campus and leveraging the students’ support to do so.
Arabesque Asset Management has an in-house data team called Arabesque S-Ray, can you tell us more about their work in using ESG metrics to assess the performance and sustainability of companies
Arabesque started as an asset manager but encountered the common ESG data quality and availability challenge. The management decided to address the problem by creating an in-house sustainability data platform, which turned into a separate company in 2018.
Arabesque S-Ray provides a suite of sustainability metrics such as ESG Score, Temperature Score, values alignment but also has a sustainability advisory team working with corporates and financial intuitions. The latest exciting project is the ESG Book, a central source for accessible corporate sustainability information, where corporates can disclose data against various frameworks (TCFD, SFDR, SASB).
The ESG Book team is working with several prominent organizations such as the IFC (World Bank) or the Hong Kong Stock Exchange. Through partnerships with these organizations, the ESG Book can address two important ESG data challenges a) increasing coverage in the emerging markets and b) the coverage of private companies.
Can you tell us about the investor engagement campaign that you ran?
There are not many quantitative funds with sophisticated stewardship strategies, so we had no blueprint on where to start. We spent months shaping our stewardship approach to ensure it fits the needs of the investment process and our shareholders. The challenge with systematic strategies is that the rules guiding investment decisions are vested in the investment model, and our portfolio manager is not taking discretionary decisions.
As such, we focused on efforts on collaborative engagement (CliamteAction100+, Share Action) and on themes. For us, the key area of concern was data quality and availability. As such, last year we launched our first engagement campaign, focusing on the improvement of GHG emission disclosure in the European technology sector.
With net-zero commitments being announced every week, we need data to assess them as what cannot be measured, cannot be managed.
Given our expertise in sustainability data, we believe that this is an area, where we can play our part in the world of investor engagement initiatives. The campaign was supported by investors with $970bn in AUM and we had a positive result from companies we started dialogues with.
Which sector do you think is under engaged with in terms of ESG metrics & why?
Being a partly tech company ourselves (Arabesque AI and Arabesque S-Ray), we saw that the technology sector appears to be under-engaged as tech companies are not your “usual suspects” for engagement due to their low emissions. However, tech companies often end up in portfolios of sustainable funds and we saw an opportunity to start a dialogue with them. I recall a very positive discussion with one of the engaged companies. They told us that it was the first time an investor approached them on sustainability matter and they were able to use our engagement letter to convince the management to focus more resources on sustainability.
What is the best advice you can give to young women aspiring to move into a career in sustainable investing?
Follow your interests and passion. ESG is just a framework that encompasses all types of business areas. Whether you are interested in cyber security, human rights or environmental management, the chances are your focus are is part of the wider ESG strategy.
Network! Based on my experience, the people working in sustainability and stewardship are very approachable and friendly (I might be biased J). Do message them, attend conferences and arrange coffee chats.
Don’t get discouraged by lack of experience. Sustainability is a moving target and being able to adapt, willingness to learn and the right attitude can often get you further than 20 years of experience.
Paula is passionate about sustainability in her private and work life. She is Head of Sustainability and Stewardship at Arabesque Asset Management, sitting on the Sustainability Committee of the group. She is responsible for sustainability related activities for the investment strategies from preparation and monitoring of sustainable investment approach, proxy voting, engagement activities to management of external relationships with organisations like UN Principles of Responsible Investment, Climate Action 100+.
Paula is interested in the relationship between sustainability and finance and completed her dissertation on the subject of green equity indices. Paula holds MSc Finance from Birkbeck, University of London and BA International Relations from Queen Mary, University of London. Paula is a Visiting Fellow at the International Sustainable Finance Centre, an impact-driven non-profit organisation that focuses on brining the topic of sustainable finance to Central Europe.
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