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| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | How to Elicit Investor Preferences for ESG? An Overview of Robo-Advisors |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Date | 2020 |
| Abstract Text | This paper will provide an overview of how Robo-Advisors elicit investor ESG preferences in their suitability assessment regarding the forthcoming changes in the regulation in MiFID 2 concerning the amendment of the delegated regulation (EU) 2017/575 which stipulates the integration of environmental, social and governance (ESG) considerations and preferences into the investment advice and portfolio management. A sample of ten Robo-Advisor was studied to analyze the di erent approaches on how the Robo-Advisors elicited ESG preferences from their clients. This was achieved by completing the suitability assessments of the Robo-Advisors and comparing the surveys on pragmatic goals of how ESG preferences were requested with respect to other relevant topics such as time-component, nancial and risk measures versus ESG preferences. Subsequently, the strengths and weaknesses of the surveys were demonstrated. The ndings show the existence of a fragmented Robo-Advisor market which uses mainly four di erent implementations such as a) no ESG preferences are requested, b) check the box to invest in an ESG compliant portfolio, c) select ESG and non ESG preferences, and lastly d) select ESG preferences. Having analyzed the contemporary status of the suitability assessments with regards to ESG preferences, this paper proposes an optimized de nition of ESG preference as well as key features for an online survey which is based on the strengths of the current questionnaires as well as the proposed de nition. Thus, the suggested questionnaire's core features are the extent of the questionnaire itself, the balance between ESG preferences and other measures, requesting ESG as well as non ESG preferences, a clear de nition of ESG preferences and the possibility of ranking ESG preferences. I |
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