ESG investment pioneer Sue Round is bowing out after 35 years in the industry.

She ended her management career by handing the EdenTree Responsible and Sustainable UK Equity fund to co-manager Ketan Patel.

The move coincided with Round’s retirement from an executive role at EdenTree, which she began in 1999 as director of group investments (see timeline, below). She remains at the firm as non-executive deputy chair.

Not only was Round investing sustainably before it was cool, but she was also posting performance any manager would envy, with a 47-month streak as a Citywire-rated fund manager.

Round passes the baton as today’s managers attempt to make sustainable investing their own, with an explosion in launches over the past two years. Although assets in investments with sustainable criteria had been climbing – reaching 25% of all assets under management in 2017 – new money doubled between 2019 and 2020 ($52bn in the first pandemic year). By 2025, sustainable assets could be a third of global AUM ($53tn).

As revealed in Amplify’s last issue, the funds industry is now awash not just with new launches but revamps too – more than 200 funds have adopted an ESG-adjacent title this year already. While there is no suggestion these funds are misleading investors, regulators in the UK, US and Europe are all poised to ramp up requirements when it comes to fund labelling.

‘Ultimately, this is about the end investor and private investors shouldn’t be surprised by holdings in a portfolio that carries the responsible and sustainable label,’ Round tells Amplify. Far from tut-tutting at ESG newbies, Round is wary of regulators imposing their particular interpretations.

‘Clearer labelling and taxonomy will help. But there is still an onus on the manager to properly explain the holdings in the fund, especially if they might seem unexpected. And labelling needs to be flexible enough to acknowledge different approaches. Box-ticking is not the right path. There needs to be a space for different approaches that are clearly explained to end investors.’

Amplify also asked Round what she made of a global economic situation that is not just testing political commitments to green reforms, but for most of this year has been rewarding investment in ‘dirty’ sectors such as oil and gas.

‘High oil prices have been here before – during the Iraq conflict and the credit crisis – with different causes and lasting for different lengths of time,’ said Round. ‘I feel strongly that a responsible and sustainable approach to investing should not be impacted by what happens in the broader macro. If you take a long-term view, you don’t need to make knee-jerk reactions.’