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Asset management must help power European transformation – DWS

‘The challenge now is to create a Europe that is undeniably dynamic, forward-looking and sustainable’


Pete Carvill

‘Massive investment’ is needed if Europe is to remain prosperous and secure, according to the CEO of German investment giant DWS.

Stefan Hoops made the remarks in this article, entitled The European Transformation. To facilitate this change, Hoops said massive investment was needed, with asset managers having a distinct role to play in driving things forward.

“We want to be a part of this solution,” said Hoops, “in the best interest of our customers and in terms of our responsibility as corporate citizens.” The current challenges faced by the continent, he noted, were climate change, geopolitical conflicts, energy independence, demographic change and increasing requirements in the healthcare sector.

“Given these and other structural and cyclical factors, the risk of a prolonged downturn is high,” Hoops added. “The challenge now is to stop this downturn and create a Europe that is undeniably dynamic, forward-looking and sustainable.

“This is probably the most ambitious and important project of our generation. For investors, on the other hand, it represents a once-in-a-lifetime opportunity that has the potential to generate positive returns at scale while driving transformation initiatives.”

Capital’s central role

Hoops argued capital would play a central role, using the example of the money needed to fuel the green and digital transformations. These, he calculated, would cost at least €595bn a year until the end of the decade – a sum he suggested the EC may not be able to meet.

To enable these goals, DWS has funded a new thinktank called the Centre for European Transformation, which is based at the Frankfurt School of Finance & Management. The mission of the institution is to “power excellence across all areas of scholarship crucial for advancing Europe’s sustainable transformation. It brings a renewed focus to issues of financing institutional and economic infrastructure, the role of transformative finance and the politics of transitioning to sustainable growth”.

Additionally, the firm has introduced the DWS European Transformation Scorecard to measure 13 European countries in their “transformational journey” across 12 sectors. In this, Michael Lewis, head of ESG research; Murray Birt, senior ESG strategist; and Maria Millina, research analyst, all of DWS, argued policy action and investment requirements were particularly essential in the key areas of electrifying the transportation sector, energy efficiency measures in real estate, improving healthcare outcomes and delivering on decarbonisation.