That Was The Week: As big as a balloon

You know how important environment and social governance is, but how can you measure it?

There is no accepted benchmark and an awful lot of new indices that have uncovered a whole load of different ways to define ESG, but, what you may not have realised is that the mass of options and the manner in which they are presented can be largely irrelevant. That’s if you follow the balloon.

Keep reading.

You are a bank, or you are a leading light in one of these traditional entities and you need some action, so what are the options. There is the obvious one of cold hard cash, still the favourite of all and much-loved ahead of almost any share scheme you might want to reward bankers with.

But maybe cash might not fix it, or maybe you might have felt a little creative, bored of counting money, you might want something else. Let’s leave it that there is some kind of target that has to be reached that may end up with a cash reward, because banks are never going to change that much.

What else could you do? Hmm, tell someone who sold an ESG-related product that they had done something good, perhaps have a monthly award for the one who has done the most. Well that is probably coming soon, but that’s not what UBS in Asia did.

Eager to follow up on the fine thoughts encapsulated in ‘Sustainable Investing: Do Well By Doing Good’ that is emblazoned across the UBS Wealth website, the bank came up with a cunning yet terribly simple scheme to get its private bankers to get down to the real business of selling investments with an ESG flavour.

It is all about balloons. And it becomes all about balloons when a member of the private bank sells an ESG-linked product and is rewarded by having a balloon tied to his or her desk. Great isn’t it! And while you imagine sitting at work, messing around with a balloon at your desk, guess what? There’s more, you also get a box of chocolates! Very little in life cannot be improved by a balloon and a box of chocolates.

The scheme worked, with a little help from the fact that you had to sell at least one product to ensure that you hit your regular target – you knew there had to be a tiny catch somewhere – but whatever works, and the smallest recognition is enough to catalyse an awareness  culture.

While you can enter the discussion of whether it is ultra-high networth individuals or just high networth individuals who are leading the push to buy ESG-linked investments – and there is a debate between different banks about which it is – before you get too excited about the apparently genuine enthusiasm so many bankers now have for ESG, the story is somewhat different at a retail level. While the ultras and highs can contemplate ESG as a concept that they would like to invest in, retail remains almost entirely wedded to the return and pretty much nothing else.

Which may only lead to the thought that, if you offered retail a balloon and a fabulous box of chocolates as a reward for buying an ESG-lined product, would you fall foul the law on inducements. Maybe just a Mars Bar and let them blow up their own green balloon.

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