ESG
ESG Is Here To Stay, Will Likely Gain Momentum – Deutsche Bank

The Germany-based bank has created the special role of ESG chief investment officer, highlighting how environmental, social and governance themes are now central to how it intends to manage money.
While worries about skyrocketing energy prices and other economic
woes weigh on minds, the ESG investment story is here to stay and
likely to gain momentum, a
newly-appointed senior Deutsche Bank figure
says.
“We deeply believe in the fact that ESG will remain one of the
biggest drivers of economic and investment change in the next few
decades,” Markus Müller, who is ESG chief investment officer at
the bank, told this news service recently. He was appointed to
the role a few days ago.
“That [ESG] requires its own function [at the bank],” Müller
said.
Müller is starting his job as banks, wealth and asset
managers continue to push into the ESG space. Something they have
to confront is being able to differentiate themselves from
competition when the ESG message is so ubiquitous. (In fact, it’s
arguable that for a firm to deliberately ignore ESG
considerations is odd, even dangerous.)
Müller said that one way in which Deutsche differentiates itself
is by its work with academic institutions and a range of
other partners. The bank collaborates, for example, with the
Cambridge Institute for Sustainable Leadership and the Ocean Risk
and Resilience Action Alliance. The insights it gleans from these
partnerships are an important way to support beneficial change,
he said.
Müller is passionate about the need to focus on the health and
quality of the world’s oceans, as well as of biodiversity. He
said he is deeply concerned that if global temperatures rise
by 1.5°C or more above pre-industrial levels, ocean environments
will worsen significantly. Declines in southern hemisphere
fishing productivity, together with increases in acidification,
ocean dead zones, and other harmful developments will become more
evident. Such deterioration is a very real threat, he said:
studies suggest that it is very unlikely, based on current
trends, that humanity can limit global temperature gains to this
target.
This senior Deutsche Bank figure brings plenty of academic and
international experience to the role, as well as time in the
trenches of banking. Müller has held teaching posts in corporate
finance and economics, having been a visiting scholar at the
Frankfurt School of Finance and the University of Bayreuth, as
well as at the Banking and Finance Academy of the Republic of
Uzbekistan in Tashkent. He is a published author of many articles
and books on ESG, economic transformation and other areas. Müller
began his career at Deutsche Bank in DB Research as an executive
assistant to the chief economist. During his studies at Münster
University in Germany, he acquired broad international experience
with a focus on China, later working as an economist at Allianz
Life Insurance in Shanghai.
Achieving better outcomes on climate change is essential, he
said, because deterioration to oceans harms the livelihoods of 10
to 12 per cent of the world's population who rely on fisheries
and aquaculture, as well as more than three billion people
who rely on seafood as a major source of animal
protein.
“Nature has its own value and we have forgotten that value…we
should not be surprised by the degradation of natural
ecosystems,” Müller said.
“It is important to understand some of the risks spinning out of
this transformation. Ultimately, all investments are ESG
investments and environmental issues will not go away,” he added.
Deutsche Bank recently reported its second-quarter figures. A question for the future will be whether there is any "ESG effect" in the numbers, such as the weight of net inflows into its wealth and asset management side.