Asset owners need to use a lot more technology in their investing strategies, according to Herman Bril, head of sustainability and climate innovation at the Public Sector Pension Investment Board, one of Canada’s largest pension funds,
“We can build tools and put technology in place to build bespoke investment strategies in 15 minutes,” Bril declared in an interview with Top1000funds, a research group covering institutional investors.
Bril knows a thing or two about new ways of investing around the world. The former CIO of the United Nations Joint Staff Pension Fund, he also served as CEO at Arabesque Asset Management, which uses AI in its strategizing.
“This means hiring people with completely different skill sets from the traditional finance analyst sitting behind Bloomberg [machines], and instead look for those who can code, data engineers and climate engineers,” he said. With his current job’s focus on environmental, social and governance factors in investing, Bril finds he needs the help of AI to crunch myriad data points and find patterns.
The tech means and the methods are in place to find sophisticated insights that were not doable when data was confined to Excel spreadsheets, he said.
“The whole technology stack available today allows for insightful analytics,” he said “Besides the standard ESG rating disclosures, you also have access to lots of different alternative data sets. The question is: How do you take that into your systems and benefit from that? How do you build insightful information with all this data suddenly available?”
Increasingly, institutional investors are waking up to the new realities, he observed. “That is driving massive change in the asset management industry and is ongoing,” Bril said. “More and more organizations are making big improvements and investing a lot of money to become technologized investors.”
He makes a lot of these points in his recently published book Sustainability, Technology and Finance: Rethinking How Markets Integrate ESG, written with Andreas Rasche, a professor at Copenhagen Business School, and Georg Kell, chairman of Arabesque, the technology company where Bril used to work.
In a previous book, Bril wrote: “My son is studying politics, philosophy and economics and the books he is learning from for economics is the same stuff as I had in the 1980s. It’s not related to reality, and we need to move on.”