ESG challenges in wealth management: Millennium bcp

ESG
Q+
06/12/2022 Interview
profile picture of João Forjaz Trigueiros

João Forjaz Trigueiros

Millennium BCP

Head of Affluent Segment Strategy

The private wealth management arena is changing. Increasingly, private banking clients realize that ESG criteria cannot be ignored and that it is not about greenwashing but about making sense of ESG and its way of building a more sustainable world for the future generations. We talked about it with João Forjaz Trigueiros, Head of Affluent Segment Strategy at Millennium bcp.


What is your ESG ambition for affluent banking and where do you see the main challenges in achieving it?

Millennium bcp guides its ESG strategy by the sustainable development goals (SDG) of the United Nations. In the new cycle of our strategic plan, we continue to pursue business opportunities related with sustainability and manage the physical and transition risks of our portfolio. Regarding corporate KPIs, our 2024 goal is to achieve an average of the ratings of the three main sustainability indexes (Dow Jones Sustainability Index, Carbon Disclosure Project and MSCI Sustainability) above 80%. 

The Bank is both developing and partnering up with third-party providers to create financial and insurance products with green and social ratings addressed to individuals. 

In Wealth Management, beyond taking into account positive and negative screening criteria to our retail investment distribution portfolio (funds, certificates, ETFs, financial insurance products), we are currently implementing new questionnaires in our execution-only and one-time investment advisory journeys to guarantee that we take into account the customer’s sustainability preferences when filtering or recommending a product. Digital execution experience plays an important role in this strategy. Through enriched product data (third party APIs), Millennium bcp now brings full transparency on product info and features such as sustainability and carbon ratings, as well as negative screening filtering (investment in animal testing, arms/weapons, etc.). 

Regarding personal and mortgage loans, we are creating specific products to encourage household energy efficiency and transition, and have promoted partnerships and pricing benefits to foster the adoption of new mobility options. In our debit and credit cards we have adopted ecological and biodegradable materials.

In our everyday banking strategy, namely our non-financial offering ecosystem (discounts to Millennium customers in other sectors) we are now screening partners regarding ESG practices and guaranteeing that we promote/shape customers’ attitudes towards SDG goals with increased visibility to retail partners leading the transition (e.g. electric mobility, green energy, health). 

Together with this offering transition, the Bank is training staff and relationship managers both on ESG principles and ESG investment offer, and delivering literacy content for customers embedded in our digital journeys. The ambition is thus to continue to develop products that are tied with the SDG goals while developing journeys to increase awareness and transparency regarding the importance of such transition. 

While the Bank is motivated to become the principal partner for this transition, we see different awareness regarding ESG in different customer generations and clusters. Recent research points out that younger customers and entrepreneurs are more sensitive to ESG principles in their banking and day-to-day decisions, and that awareness among younger adults is rising rapidly and may shape new trends both in active and passive portfolio decisions.  

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