Delano spoke with Claude Hirtzig, head of retail and private banking at the state savings bank Spuerkeess, about simple steps to greenify personal savings and investments.
Aaron Grunwald: What can an average investor do to ‘green up’ their portfolio?
Claude Hirtzig: It’s threefold. We have, for retail clients, investment funds we launched over the last two years, which are in the green space… we launched a Lux-Equity Green and a green bond fund… [we have investment] funds that have a specific impact on the end investments. We want the companies we invest in to change their behaviour, and we want to have the proof that they do it, and we want it to be measurable. So the whole data question is quite important, because we have to show our clients that our investment vehicles are doing what they are expecting.
In private banking, we just launched [in November], a new managed account offering, Activmandate Green, which is our discretionary portfolio management [product]. Investments are in the green space--environment and climate--then some thematic approaches--clean energy, water and so on--and green bonds.
For the private banking products, what is the minimum investment?
The absolute minimum is €150,000 in those managed accounts. It should be a little bit higher, ideally, but it’s possible to do it for part of your assets with €150,000.
And for the retail funds?
€100. There’s no real limit. That’s probably the product that has the most success in that space. We have investment plans, investing in the two green funds. And when we started the offerings, we saw that this responded to demand by our clients and we emphasised that, so we have thousands of investment plans now, investing even small amounts. You can start with €50 [each month] investing in those two funds.
So maybe that’s an easy first step for someone?
An easy first step, yes.
I think you were going to mention another product?
The third is when we are talking about investments, generally speaking, we talk about funds, so investment advisory contracts. But one should not forget the general patrimonial approach and even investing in your house, in your flat might make sense. And that’s what we are telling clients where you should start. If you didn’t do it already, you should start reflecting about keeping up your house or your flat, investing in renovations, take into account the public [aid] you can get to do that. We have trained our advisors to help our clients [learn about the public subsidies available to enhance] environmental efficiency. And that’s quite an important topic, because, well, first it saves energy, of course, and then it increases the value of your residential property.
Do you have a specific credit line or product to finance renovation or energy efficiency projects for a home?
You can, of course, do traditional residential mortgages. For bigger projects, it’s an easy way. For smaller investments, you can do a consumer loan if you want, but we have a vehicle in between--Ecoprêt, which is exactly tailormade to be in between. [It’s for] investments that you want to pay back over 10 years, up to €100,000. And that’s exactly what the cost of an improvement of a normal house or flat can be, so [upgrading] the insulation, changing the windows, for example.
Are there savings products that have a good green influence?
Yes, on the savings product side, we have our Etika savings product, but rates are low. So that’s not the point where we put most emphasis on at this moment in time.
When it comes to green investing, there’s a lot of jargon and technical terms, like ESG and SFDR, that average investors may not really understand. What do you think is the most important financial education element to get out to people about green investing?
Well, the starting point is that banks are being used as leverage to get things moving… What we did on the perspective of financial education, we integrated ESG in all of our speech in the mortgage space and in the investment space. So you should at least be told that the possibility exists. That’s the basic level. And over the next couple of months and years, we will be more strict in that respect… If you’re investing in residential properties, you have to take into account simply the fact that energy savings or the energy class is important for the value of your home.
Under new the EU’s new Mifid rules, your advisors will have to start asking clients about their environmental risk appetite. How difficult is that to roll out?
[That rule comes into effect] in August. I should say, the speech is ready, the advisors are trained for that, they know the background. What is important, obviously, is the technical aspects, how do you structure the questionnaires? How do you take into account the scores of the responses? How would you measure it afterwards? And that’s still being implemented, which is quite complicated, I have to say. But we have to find a way so that the speech remains easy enough for the clients to understand, but the background is strong enough to be able to base your decisions on it.
What else is important to know about green investing?
We have to educate [our clients], most of them at least, towards a sustainable way to invest in green investments. And do it in a way that everybody understands. So they shouldn’t consider it as a constraint, which may be a risk. You have been talking about methods. So in context of Mifid, you have to ask questions. But we have to find a way in order to take the customer by their hands and to move with them towards the goals [set by political leaders] and that we want to have implemented too, because we as banks--the customer won’t see that--will be under pressure by the authorities.