Mamadou Abou-Sarr: Bringing Intentionality to ESG
Who are you?
My name is Mamadou-Abou Sarr. First and foremost, I am the son of parents from Benin and Senegal who migrated to France in the seventies who gave my siblings and I an amazing education. I am a husband and father to four lovely children who were born around the world. By trade, I am an international financier who co-founded V-Square Quantitative Management (V-Square) in 2020 after an accomplished career in asset management working for global financial services company across the U.S., Europe, Middle East, and Africa.
What made you decide to start V-Square Quantitative?
The common thread in my 18+ year professional journey is a fundamental belief that profit maximization should work hand in hand with sustainable investing. I still have the same interest, passion and drive for sustainability sparked in my youth; my interest in social responsibility can be traced back to my childhood devotion to ecology. I would accompany my father, a Doctor of Science specialized in genome and plant evolution, to the French National Centre for Scientific Research to learn about the importance of biodiversity. Nature conservation was therefore part of my life growing up.
My own random walk down Wall Street, starting my career as a foreign exchange (FX) trader to becoming the global head of sustainability and product innovation at a large asset management firm, taught me a lot. When I co-founded V-Square in early 2020, I had an informed view and a global expertise on sustainability issues gained through my thousands of engagements with investors, academia, and regulators around the world, discussing Environmental, Social and Governance (ESG) integration across asset classes. As an investment practitioner, I have seen the ESG industry move in an uncoordinated fashion, as if in a Brownian motion, leading to more complexity. Nowadays, it is a daunting task to address the lack of consensus in industry standards, untangle the plethora of ESG data, navigate a range of scoring methodologies, and assess the relevancy of ESG signals. I developed a Global Positioning System (GPS) approach to sustainable investing, one that focuses on materiality and profitability.
“I wanted to build an investment firm that has the power to understand quantitative data but also has the ESG expertise to decipher, harmonise and standardise this data leading to better informed investment decisions. For many, the Newton’s cradle brings back memories of physics classes, yet for me, this image crystalizes so well this stage of the ESG industry and why V-Square is focusing on intentionality. With the surge of scoring methodologies, this could create false positives, therefore I strongly believe that integration of material sustainability factors into investment portfolios needs to be intentional and not accidental to achieve targeted impacts. ”
How did you find your way into sustainable investing?
Erol Ozan eloquently stated that “Some beautiful paths can’t be discovered without getting lost”. I have trained and apprenticed at large and small financial services companies around the world including HSBC Global Asset Management, Morgan Stanley Investment Management, Amundi Alternative Investments and Citi through FX trading, strategy, and business development roles. My passion for the field can be traced back to childhood and in adulthood I was able to spearhead the development of a global ESG platform at a large US asset manager to finally reconcile my true passion with my investment acumen.
Why do you think diversity in sustainability/sustainable investing is important?
With over $35 trillion of global sustainable assets around the world, sustainable investing has become one of the fastest-growing segments in the asset management industry. With such a sustained growth over the years and positive forecasts on asset growth, sustainable investing is now finding its way into many investors’ strategic asset allocations. I believe that value created at the expense of non-investor stakeholders can be short-lived. Over long periods of time, stakeholder and shareholder interests become increasingly aligned and we take these factors into consideration when making informed investment decisions.
Diversity and inclusion have been much talked about in the last few years. More than mere buzz words, they increasingly became a focus for companies and fund boards. Indubitably, diversity in the workplace can be hard to implement, especially if firms fail to recognize its value or the obvious challenges. For instance, we all have biases that tend to be confirmed within our own social circles. This situation can make us think of Pierre Bourdieu’s theory of habitus, which states that a system of dispositions, acquired schemes of perception, thought and action is developed through an individual’s engagement in society. Interestingly, drawing a parallel with portfolio diversification can help us understand that diversity adds value when implemented properly.
Most people positively see value in diversifying the firms’ outputs, e.g., the strategies, the products, the revenue streams. With human capital being a key input for companies and fund boards, it may be fair to assume that there is value in diversifying that input. Diversity and diversification find more in common from their Latin roots; they both carry value. I would argue that the avoidance of group thinking and “My Buddy-Says-So” phenomena would be to bring more diversity in boards, fund boards, etc.
What advice would you give to students, young professionals or mid-career professionals that want to get into this sector?
I have the honor of mentoring students, young professionals, and mid-career professionals across many sectors. Reflecting on own my path and experiences, I developed a set of visuals to support career pathing. I called it the Random Walk vs GPS career path. My main advice to students and professionals is to develop their own GPS approach and lead with passion, empathy, and humility.
Mamadou’s approach to career pathing.
What has your proudest moment been as you have made your way through the sector?
My proudest moment was to be recognized in 2017 in Top 50 Individuals who have contributed the most to sustainable & responsible investment industry in the world (IRRI). More than the recognition itself, I was humbled by the fact that my approach to teamwork and innovation were acknowledged by peers and investors.
What issues in sustainable finance are you most concerned about?
The global pandemic, social injustice, and natural disasters impacted the lives of many people and took a significant toll on the global economy in 2020. For the economy to build better value for longer, I believe that governments, companies, and individuals must embrace many of the core tenets of Environmental, Social, and Governance (ESG) investing. The issues I am the most concerned about pertain to:
Climate Risk,
No S without G (No Social justice without a Governance framework),
Green washing and Green wishing.
What quote do you most live by and why?
More than a quote, I live by a Fulani expression Dowe Tan which can be translated to Altius (higher) in Latin.
Everyday before going to school, my father would raise my right hand in the air and pronounce these two words in a divine way: “Dowe Tan!” It was our rally cry, a way to galvanize me to stay focused, try my best and never give up. I believe in having a clear sense of identity, I was raised to believe that to go somewhere, you need to know where you came from.
To find out more about Mamadou and V-Square Quantitative Management, click here.