Anna Sophie Herken on The Future of Sustainable Finance

Technical innovations and digitalization are rapidly changing the face of ESG. Business Division Head at Allianz Asset Management, “40 over 40” Germany 2020 Alumna, and CURAZE member Anna Sophie Herken has her finger right on the pulse. Anna Sophie shares where she sees opportunities for business and the path ahead for sustainable finance

by Natascha Zeljko | 29 Jun, 2022
Anna Sophie Herken The Future of Sustainable Finance

What are the main issues and challenges in your current business?

We are involved in two different businesses: global asset management and life insurance in the US. There are many common themes and challenges here. Both industries are very dependent on the development of the global markets, so the long-lasting low interest rate environment, the geopolitical situation, and the demographic development are all very important drivers and have an impact on whether we can operate successfully. In particular, the pressure on fees and margins, changing customer requirements, future issues concerning asset classes and product innovations, and the development of new markets are current hot topics. All these changes mean that we must think more holistically and identify even more synergies between the various business areas. We are driven by the question of how we need to change our business so that we are still relevant and successful tomorrow and the day after tomorrow.

In addition, we focus on the major transformation topics: These are digitalization and technical innovations that affect our business model fundamentally and at all levels along the value chain, but also sustainable finance – here Allianz Group is one of the pioneers and is actively driving the sector forward. A lot is happening in sustainable finance right now: while Europe is still leading the way, especially with the Green Deal and the new EU regulation, the topic of ESG is also becoming increasingly relevant in other regions such as North America and Asia. At the same time, we see that ESG approaches are evolving towards more thematic investments and impact investing. And while the focus is currently still very much on the environmental aspects, we will see significant developments in the social and governance dimensions in the coming years.

The great thing is that all these topics open up a number of interesting opportunities for us not only in business, but in supporting positive social developments.

What innovations and tech trends do you find particularly exciting?

Any innovations and tech trends that advance sustainable finance. A key challenge here is the lack of data as well as the difficulty in comparing relevant data. There is a lot happening here, such as the development of ESG data or tech-driven solutions, this includes alternative data sourcing, data capturing and validation as well as data reporting – there is a huge need all around. This affects all aspects of the value chain in both asset management and life insurance.

Also, the other technological opportunities that are available in asset management, such as "customization", are only made possible by new technologies that also allow individuals to participate in solutions that were previously only available to institutional or high net worth investors. Finally, there is the democratization of private markets, which is only accessible through technology solutions and made possible by blockchain.

What idea, product, or thought leader has excited or inspired you lately?

There are too many to pick just one. I learn about new ideas almost daily, especially those focusing on sustainability. More specifically, all the supposedly small steps and innovative ideas that make our world more sustainable inspire me time and again.

Why do cultural change and digital transformation belong together in your opinion?

There are numerous reasons. Firstly, we can only recognize and address the necessity and scope of the necessary transformation if we have created the appropriate open mindset for it. To do this, we need to think outside the box, immerse ourselves in trends, and understand future customer needs. In addition, processes and the way we work together will change both during and after transformation, simultaneously a cultural change will also take place. Transformation only works if we have the right culture and then question and adapt it again and again.

In one sentence, what is one topic that we should no longer be discussing in five years?

Diversity will hopefully soon be lived and practiced and therefore be the norm!

What makes companies and leadership successful in the long term…

Thinking long-term and being able to react and adapt to changes in an agile and fast way. As the environment becomes more and more complex and interfaces become more and more important, we need diversity of minds. All of this must also be reflected in leadership: the ability to get the organization to think big picture and long-term and to be able to react quickly and flexibly to acute changes. Above all, to be authentic, reliable, honest, and inspiring – a safe beacon in a rapidly changing, complex, and not always simple world.

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