ESG-talks is a series of interviews with ESG professionals with diverse educational and professional backgrounds, whom we regard as role models. This series aims to encourage participation in the ESG and responsible investment (RI) space, to attract talent from different sectors and industries, and to widen the conversation.
My-Linh Ngo is Head of BlueBay ESG Investment, Portfolio Manager for the BlueBay Impact-Aligned Bond Fund, RBC BlueBay, the brand for RBC Global Asset Management in the EMEA APAC region.
My-Linh studied Environmental Sciences and Sustainable development at the post graduate level, up to a Masters’ degree in the case of the latter. Today you work as a portfolio manager of a sustainability, impact orientated bond fund, as well as heading up ESG investing for your company.
To find out how one would follow this career path, we start by unfolding it from the very beginning.
Was there any specific catalyst during your studies that led you towards sustainable finance?
I would love to say that it was all carefully planned, but the reality is quite the opposite. Whilst my dad was always encouraging me to study for a profession which in his view, provided steady income and job security, I went down the route of choosing subjects that interested me in order to keep me motivated to study. So I went for those like Geography, Biology and Social Sciences; subjects to do with people and planet, and which allowed me to keep variety in my knowledge set. This then led me to study Environmental Sciences at university, followed by a couple of Masters, including in Leadership for Sustainable Development. The latter was a contrast to my former, more academically driven studies in being more focussed on work-based learning. The Master of Professional Studies (MProf.) programme was run by Forum for the Future, a sustainability not-for-profit, in collaboration with Middlesex University. It was a unique, intensive course, including six, one-month placements across different sectors, aimed at providing students with real-world knowledge of sustainability solutions and the skills to work across a range of stakeholder groups. It was a truly interdisciplinary experience.
When it came to finding a job, I still did not really know what I wanted to do as a profession. It was whilst applying for roles with sustainability consultancies – an obvious route to go down – that I heard from a former student on my Mprof. course that one of the placement organisations was recruiting for a trainee ESG analyst role. So I applied not really expecting anything to come of it. And I have been in the sustainable finance ever since.
In your opinion, what are the most important skills that someone interested in this career should acquire?
One of the encouraging aspects of the responsible investing (RI) industry is that it is very inclusive and made up of a very diverse group of people. This is important as people bring different perspectives, knowledge and skillsets. Some like me, come into it from a sustainability background, others with experience in economics and finance. Some have detailed technical knowledge in one specific ESG area such as climate change or human rights, whilst others of which I am one, will tend to be more generalists. We have individuals who have specialised in this field early in their careers, and others who have pivoted their careers into the field. It is never too late to get into the space.
Beyond the hard skills, having soft skills is also important. I often say working in this field means being a ‘change’ agent: you are working to encourage people and organisations to do things differently in order to ensure quality of life for all whilst not degrading the environment. To be effective, you need to be able to bring people along – ideally willingly – and not through force. This requires the ability to get on with people, have humility and integrity, and work collaboratively with others to help build consensus. It is not an easy or quick task, so having passion and motivation, as well as strong emotional resilience are also beneficial qualities to have.
We are in 2023, and you can look back at a more than 20 years long career. What would you say are the significant differences compared to the early 2000s?
Well, there is clearly much more awareness and understanding of the vital role capital markets play in achieving sustainability. The proportion of the industry that is actively incorporating ESG has grown and become more global in nature. The types of investors doing it has also broadened – we are seeing major passive and active investors – including institutional ones implementing ESG practices.
ESG data and analytics has come on meaningfully with more companies proactively reporting on such matters and better analytical tools to inform on investment decisions. We have also seen an expansion of ESG approaches beyond negative screening, and into asset classes beyond equities which is so necessary.
Another obvious shift has been in the terminology used to describe the market. In the past people tended to use terms like ESG, ethical and sustainable investment interchangeably when explaining it to others, we were less concerned about the need to be exact. Today, because regulation has formalised what some of these terms mean, with ESG investing tended to be associated with a focus on financial materiality, whilst sustainable investing is more liked to achieving real-world outcomes.
But what is less good is that, we have not seen as much actual improvements across some key environmental and social problems as I had expected to see. Rather, there is increasing talk about systematic risks like climate change, and now nature and biodiversity. But we still have time, and we can accelerate action.
What do you see as some of the key challenges for the industry?
Whilst regulation has played a key role in helping to raise the baseline for RI practice, it’s not without its challenges. For instance, we are seeing different regulators and policy makers take a fragmented approach, not surprising given the diverse cultural context and political motivations. Whereas well intentioned, regulators risk potentially developing measures which could undermine the very thing they are looking to promote. Their polices could fail to fully appreciate the nuances when it comes to different ESG approaches, or complexity of investments in asset classes outside of equities, and stifle innovation. Clearly there is a need to build trust and have accountability of RI practices, to avoid ‘green-washing’. But it is not a case of more regulation, but having smart regulation, and that is it’s a tricky balance to strike.
Then in terms of ESG data and analytics, whilst we are seeing, and will see more in terms of quantity of ESG data going forward, I am concerned we could lose sight of the need for quality. It is true that being able to allocate a number to something is certainly helpful and can inform decisions, however, we need to be cautious as some of these tools can imply a level of preciseness which is not necessarily valid. ESG data is a means to an end, but not the end in itself, and not having it is not necessarily a reason not to act.
We should not lose sight of the ultimate goal. Keep perspective is key, take the issue of climate change and the need to decarbonise. Whilst it is right we work to decarbonisation investment portfolios, setting net-zero goals, we need to ensure we do not just have portfolio level decarbonisation without this actually driving down carbon emissions in the real economy.
Do you think that change will come from big players? Or do we need a larger number of smaller players having more impact?
Change needs to come from all segments of the market, with each playing important but unique roles. The two are interconnected, and important for each other. Innovation is usually more likely to come from smaller players, bringing fresh ideas and innovative approaches to ESG and sustainable investing, and more than happy to disrupt the status quo. As they gain greater traction, some of the new ways of working will begin to be adopted by larger, more established players. This shift in practice with larger players will be more incremental, but they will bring much needed scale as a result of the institutionalisation and ‘normalisation’ of RI practices.
How do you see the future of ESG in five and ten years?
The optimist in me really hopes we see meaningful progress in five years – we are running out of time to avoid critical tipping points. ESG investing has already become mainstream within the last few years. But the same cannot potentially be said for sustainability and impact investing – which is about real-world outcomes. Here I am less certain but would not rule it out: the Covid pandemic has shown how quickly the world can act in the face of an existential risk, where there is a clear will to do so. The more people we have coming into this profession the greater our chances of building a more sustainable world.
Interview taken by Rita Sebestyen during June 2023