Setting our market activities as a reference for ESG advisory and solutions
3 Questions to Enrico Vietti, Head of Global Markets Sales, Societe Generale in Switzerland
1. Which are the main trends you can identify for 2023 in terms of market activities? How will these trends play out in the Swiss market?
From late 2022, we have been seeing a strong rebound in markets, which has continued during the start of 2023. While the geopolitical situation in Ukraine has not yet improved, markets rallied on the back of softer inflation expectations, lower tensions on the commodity markets, China reopening and better visibility on central bank’s ending of the tightening cycle. Our analysts see main equity markets close to year-end targets and while there have been and there will be bumps, we are now in a more moderately volatile environment.
On the FX side, we expect the dollar to be the weakest of the G10 currencies in 2023, with the Fed being closer to the end of its rate-hiking cycle than most. The Euro has been enjoying a strong rebound since November 2022 and we expect this to continue at least in the first part of the year. Lastly the Swiss Franc has managed to strengthen against the USD in 2022 and our analysts see a stabilisation of the pair in 2023, with the Euro-Swiss Franc to go back above parity. Improved fundamentals, valuations and technical factors argue for a stronger performance of emerging markets currencies this year. We think that all these elements will contribute to an active 2023. We witness an increased interest in fixed-income products, systematic strategies and hedging which, alongside our traditional equity focus, are at the core of our offer to Swiss clients.
2. What are the main expectations of clients, particularly in terms of ESG?
We saw an increased attention to ESG topics: Swiss clients are becoming increasingly aware of the impact of their investments on society and the environment and are seeking to align them with their values and those of their final clients. As a result, they are requesting more ESG-related information, analysis, and solutions. Approaches differ depending on the type of client: insurance companies and private banks are demonstrating a more proactive stance.
There is a new focus on advisory services to assess ESG investment approaches and strategies: clients are now asking us in particular how to build a portfolio based on ESG products and are interested in regulatory developments.
3. How has your business model evolved to be in line with Societe Generale's commitments on ESG challenges?
Our Global Markets teams have been accelerating the integration of Sustainable and Positive Impact Finance and ESG activities. In 2006, Societe Generale was among the pioneers in establishing a research team dedicated to sustainability questions. Then in 2019, ESG factors have been integrated into our equity evaluation framework, making Societe Generale as the first bank to systematically integrate ESG criteria into its equity valuations and recommendations. Our ESG coverage has since expanded to all our research teams, across all asset classes and areas of technical expertise - drawing on over 160 analysts, we provide an integrated, cross-asset view of all aspects of sustainable investing, including our ESG research platform.
Building on this sustainability research franchise, our ESG offer is now declined around three main pillars: solutions, advisory and awareness.
We are committed to support our clients in their transition by offering sustainable and positive investment products, notably using ESG indices, both flagship and custom made, which are then the building blocks of investment strategies; beyond investing, our offering also encompasses MARK financing solutions embedding ESG priorities.
Finally, we are convinced that team commitment is key: we have implemented an extensive ESG training programme for our sales staff to help them navigate such a complex topic and introduce it to clients in a consistent manner in line with the Group’s standards.