A dozen UK investment consulting firms have established a group aiming to improve sustainable investment practices across the investment industry.
The group - the Investment Consultants Sustainability Working Group - believes that, while the investment industry has made progress on a number of areas within sustainability, more urgent and constructive action needs to be taken to address the systemic challenges that the industry faces, particularly in relation to climate change.
The 12 member firms said that, as a critical link between asset managers and asset owners, they would be "optimally placed" to promote a focus on sustainability which could ultimately help to drive greater change within the industry.
The group has outlined six commitments for group members:
- Engage across a broad range of stakeholders, including asset owners, asset managers and regulators
- Seek investment outcomes which are genuinely sustainable and not treat sustainability as a tick box exercise
- Align with, and support, existing industry bodies and initiatives
- Support their respective clients who are too small to meaningfully engage with industry initiatives
- Create a guiding set of principles that indicate good practice with practical advice
- Be a body where regulators and other stakeholders can seek input when they need a view from investment consultants.
The group has also identified six individual workstreams that it plans to explore initially: reporting; asset owners; asset managers; stewardship; regulation; and innovation, new products and impact investing.
On areas where there is already work underway by industry bodies, the group believes that input from its members could be even more impactful. As such, the group will look to support current initiatives and provide additional input in key areas where there may be further work to do.
Member firms of the working group are as follows:
- Barnett Waddingham
- Cambridge Associates
- Hymans Robertson
- Lane Clark and Peacock
- MJ Hudson Allenbridge
- Willis Towers Watson
Consultants at each of the advisory firms commented on the launch
Willis Towers Watson global head of research Luba Nikulina
"It is critical that we use our collective voice now to not only influence how the investment industry approaches sustainability; but importantly to provide greater clarity on what is needed and more support on what actions can be taken to make a tangible difference."
Mercer global head of investment research Deb Clarke
"Our clients are focused on ensuring that they generate their investment returns in a way that is sustainable and gives consideration to all stakeholders. Using the collective voice of the consulting industry to ensure greater transparency, consistency and support is an important step forward."
Cardano deputy chief investment officer Keith Guthrie
"The climate crisis is one of the greatest risks confronting pension funds. Its impact will affect pension scheme members and their families. If pension funds are able to act together, they can have a positive impact to mitigate these risks."
Aon senior partner John Belgrove
"This is a new and powerful industry initiative. We recognise that the circumstances of individual clients will always come first in designing solutions. However, these collective statements and intentions should leave asset owners and fund managers in absolutely no doubt about the high importance that Aon and the UK consulting industry places on sustainable/responsible investing, and the embedding of ESG risk awareness in long term portfolio construction."
LCP partner and head of responsible investment Claire Jones
"LCP believes investing in ways that support the long-term health of our social, environmental and economic systems will help our clients to achieve better long-term financial performance. We are therefore delighted to support this new industry collaboration whose objective is to deliver more sustainable outcomes for our clients, their beneficiaries and society as a whole."
Barnett Waddingham policy and strategy lead Amanda Latham
"Working together across our industry is vital to building back better and greener in the long term. Mobilising the collective expertise of investment consultants is going to help deliver the genuinely sustainable outcomes we need to support the transition to a low carbon economy."
MJ Hudson Allenbridge managing director and head of research Joanne Job
"As the momentum underpinning sustainable investing continues to gather pace, we believe that we need to act together and align our approaches in order to really make a lasting difference. As investment consultants, we believe that we have a responsibility to enhance transparency and standardisation across the investment industry, across traditional and alternative investments. This will be the best way to not only effect change, but also to improve standards across the board."
Cambridge Associates partner and European head of sustainability and impact Annachiara Marcandalli
"We recognise the importance of being part of a broad initiative that helps establish best practices as sustainability becomes increasingly material to investment returns. This collective collaboration will not only allow us to set the standards for better aligned economics as the industry evolves, but it also presents the opportunity for investors to evolve more quickly to build resilience into their investment decision-making frameworks."
Redington managing director and head of manager research Nick Samuels
"At Redington our mission is to provide financial security to 100m people, but implicit within that goal is that it has to be in a world worth inhabiting. With an issue as important as the future of our planet, collaboration is vital if we are going to be successful in tackling the challenges we face."
Isio partner Pat Race
"Sustainable investment has risen to the top of investors' agenda over recent years and we owe it to future generations to keep it there. This year more than ever has shown not just the importance but the logic in driving higher standards on environmental, social and governance issues. Isio is proud to be part of this important initiative and we look forward to working together to deliver vital progress."
SEI investment director and ESG lead in EMEA and Asia Cai Rees
"We are looking forward to working alongside our peers to target real change in sustainable investing. As a fiduciary manager, our clients rely on SEI to ensure the highest standard of stewardship and sustainable investment. The Investment Consultants Sustainability Working Group will be an important building block for our industry."
Hymans Robertson partner & head of responsible investment Simon Jones
"Climate risk is the issue of our time. The financial services industry has a huge part to play in addressing this with a need to recognise the influence that key participants can have and accept there is a need for change. We believe that working with like-minded organisations in the pursuit of more sustainable outcomes is critical for our clients and their members and we are therefore delighted to participate in this important collaboration."
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