Stockholm (NordSIP) – “First, I want to know a little more about you” is not an unusual start for an interview. Except, this time, it comes from the interviewee. But then, Van Lanschot Kempen’s sustainability expert Eszter Vitorino-Füleky appears to be just the kind of inquisitive and humble person who would grab the opportunity to listen and learn.
This open-minded and inclusive manner has undoubtedly served her well throughout a long and fruitful career in sustainability. Before joining Van Lanschot Kempen in 2019, Vitorino-Füleky worked for nine years at the Global Reporting Initiative (GRI), the standard setter for corporate sustainability reporting, as Head of Capital Markets Engagement. She was also a member of the EU Commission’s first Technical Expert Group (TEG) on Sustainable Finance, focusing on corporate disclosure recommendations.
The “doulas” of double materiality
Prodding for years into the technical details of reporting standards might sound rather dry and tedious to some, yet Vitorino-Füleky recalls fondly the animated discussions she has had over the years with intelligent and enthusiastic peers and colleagues. She even lets us in on a secret. According to her, it was over one such discussion with Swedish sustainability veteran Marie Baumgarts that the concept of double materiality was born. “Unfortunately, the two of us couldn’t come up with a catchy name for it at the time, but our colleagues at the TEG and the European Commission did a good job later,” she jokes. It is not a claim to fame. “We were at most ‘the doulas’ of the concept,” she says. She sounds proud, however, to have planted the idea in the disclosure recommendations.
On rules, and exceptions
Vitorino-Füleky’s area of expertise is corporate governance. “It is the beginning of all responsible investing. Yet, these days, the G in ESG is very often watered down, taken to represent the governance of environmental and social issues only,” she laments.
Working for a professional asset manager with thousands of holdings makes it imperative to rely on a rules-based engagement approach. How else would you be able to handle the numerous meetings with portfolio companies? “I struggle, however, to reconcile this approach with my belief in contextualising the engagement work,” confesses Vitorino-Füleky. “You need to know a company to engage with it on governance issues. You can’t just push for notional diversity on the board, for instance, you need to know when to make an exception.”
In search of true diversity
Speaking of diversity, she points out that there is much more to it than the gender aspect that most focus on. “We need to embrace a broader definition of the concept,” she urges, alluding to the importance of diversity of ideas and backgrounds, not just formal box-checking. From personal experience, Vitorino-Füleky is also aware that it is not always the case that women are unwelcome in the boardroom. “Sometimes, it is all in our own heads,” she says. “I was paralysed the first time I was admitted among the blue suits. Until I realised that I could be myself even in that environment.”
There is, however, natural resistance in some circles. Vitorino-Füleky has heard more than once hurtful comments that just because she is a woman and a foreigner, she is “automatically in”. Yet it might be just a symptom that things are changing. “The loss of psychological safety in the dominant group inevitably leads to a backlash,” she says. “Unfortunately, it also fosters polarisation of the debate and blurs the focus on solving the issues.”
Passing the “blush test”
At Van Lanschot Kempen, Vitorino-Füleky has found a platform to affect real change. She sits on the investment committee of tangible impact solutions such as Kempen SDG Farmland and Kempen Global Impact Pool. “My role in the committee is setting targets aligned with the SDGs and measuring progress, not making the decisions themselves,” she explains. It provides, however, a great platform to challenge the portfolio managers and encourage them to think about the many and often conflicting aspects of an investment.
“There will always be trade-offs,” admits Vitorino-Füleky. “The question is, which are the ones that you would lose sleep over? Just because a company is rated highly by an ESG data provider does not always mean you can explain to your kid why you invest in it,” she adds, referring to the ultimate “blush test”. Only recently, she had such a moment of truth when her daughter saw pictures of children working in the cobalt mines of Congo. Sourcing rare metals for the booming EV industry is important, but how can you justify the human suffering involved, she wonders. For her, working in sustainability has never been just about the head. “You need to put your heart into it.”
Priorities and partnerships
Reading Van Lanschot Kempen’s newly released 2022 Stewardship and Sustainable Investment Report, there seem to be plenty of reasons for Vitorino-Füleky and her colleagues to be proud. “We are making decent progress,” she says humbly. It is a matter of finding the right priorities, according to her. “We ask ourselves two questions: What is most urgent? And what is investable?” The answers then determine the areas to focus on (limit climate change, limit and reverse biodiversity loss, ensure that people live longer and better, produce and consume circular) as well as how to do it (investing in the energy, food, and materials transition).
Vitorino-Füleky is highly aware that asset managers and asset owners need to unite their efforts to achieve true impact. Van Lanschot Kempen is, for instance, one of the companies in the coalition engaging with tech giants to strengthen their management of human rights risks and impacts, initiated by Sweden’s Council on Ethics (AP-fondernas etikråd). “In our industry, we can’t afford to compete on sustainability,” she says. “We can compete with other asset managers on performance or fees. On sustainability, however, we must act as one.”