ikigai money unveils all-new sustainable portfolios

By Joy Dumasia

ikigai, the premium FinTech app, has unveiled a newly redesigned portfolios in line with environmental, social and governance (ESG) criteria. ikigai has updated all its portfolios to screen out companies involved in any practices identified by MSCI ESG research: controversial weapons, nuclear weapons, civilian firearms, tobacco, UN global compact violators, thermal coal and oil sands.

The update removes stocks from harmful and unsustainable business practices and makes a significant difference to the portfolios’ carbon footprint, reducing it by up to 27% compared to the original portfolios. The move has no significant impact on the performance of the portfolios based on back-tested calculations while building further resilience for mid and long-term investors.

In conversation with IBS Intelligence, Edgar de Picciotto, Co-Founder at Ikigai Money, commented on the announcement: “Sustainable investing is the way forward to build a sustainable future for our society and our planet, and through this important change to our portfolios, we are helping our clients improve their financial wellbeing in a way that is more in line with their beliefs. This is an exciting move for ikigai and our first step to give our customers the opportunity to invest in line with the causes they’re most passionate about.”

The new ESG allocation is based on research from MSCI, which rates companies based on their exposure to ESG risks and their ability to manage those risks relative to peers. MSCI is one of the main global ESG data and rating providers.

“One needs to be in harmony with their finances and should think of the goals, that is why we came up with Ikigai as a way to convey that with us it is not about a getting rich quick scheme but being in harmony with your finances and investing for the long term,” de Picciotto added.

Like ikigai’s original wealth offering, the portfolios continue to be fully managed, globally diversified and span five different risk levels. New customers who wish to invest in one of these portfolios can do so by simply opening an account and passing the investing profile. ikigai’s portfolios are designed to collaborate with BlackRock, the leading global asset manager, who provides ikigai with insights and asset allocation guidance.

When explaining to IBS Intelligence the value proposition of the company, Co-Founder de Picciotto said: “The goal was to develop a private bank for the next generation of wealth because we believe that the current banks are not equipped to solve the challenges of the generation. We think the new generation of wealth deserves a service more adapted to their needs, so more digital than what the case is right now.”

The shift towards a more environmentally-aware portfolio has become a priority for many players in the industry, as Joe Parkin, Head of Banks and Digital Channels in the UK at BlackRock, explained.: “In today’s market, ESG considerations have become a key element of the investment decision process as UK investors increasingly consider the impact their investments are having,” he said, “Embedding sustainability into the core of an investment portfolio is enabling more people to transition to sustainable strategies, and we are delighted to support ikigai as they update their wealth offering to incorporate ESG criteria as their new standard.”

Recently, IBS Intelligence reported that Ikigai, the first UK app to bring together everyday banking and wealth management, brings its customers Apple Pay. A safer, more secure and private way to pay helps customers avoid handing their payment card to someone else, touching physical buttons or exchanging cash and uses the iPhone’s power to protect every transaction.