Deutsche Bank backs Arabesque’s ESG strategy

(Funds Europe) Deutsche Bank has partnered with the “world’s first” quant asset management firm that specialises in environmental, social and governance (ESG) investing.

The bank is to employ Arabesque Partners indices to launch a range of new ESG stock-selection investment products.

Based in Frankfurt and London, Arabesque said it is the world’s first specialist ESG quant asset manager and uses over 100 billion data points to select an investment universe of about 1,000 companies that “deliver superior returns”.

Sean Flanagan, head of equities and hybrids structuring Europe at Deutsche Bank, said the partnership aims to achieve sustainable investment portfolios without sacrificing returns.

“There is a widespread assumption that sustainability comes at a cost, which is a reduced rate of return. But Arabesque’s combination of environmental, social, and governance selection criteria and performance has challenged that assumption.”

Flanagan also said that Deutsche Bank had seen a strong increase in demand for ESG-based products over recent years.