A group of 12 leading investment consultancies in the UK have banded together to help bolder sustainability practices across the industry. Aon, Barnett Waddingham, Cambridge Associates, Cardano, Hymans Robertson, ISIO, LCP, Mercer, MJ Hudson Allenbridge, Redington, SEI and Willis Towers Watson will collaborate as ESG goals in investment shoot up the agenda of investment professionals.
Over the last decade, environmental, social and governance (ESG) risks have swiftly risen to the top of the investment community’s agenda. One survey from EY previously found that 92% of investors agree that over the long-term, ESG issues such as climate change and executive diversity have quantifiable impacts on businesses. Factoring this into a business plan is proving easier said than done, however, with one example of this being that fewer than one-in-10 pension funds having developed a dedicated resource focused on responsible investment.
In response to rising concerns within the investment industry that more urgent and constructive action is needed to tackle systemic challenges – particularly climate change – several of the UK’s largest investment consulting firms have established a working group to assist clients. The Investment Consultants Sustainability Working Group consists of Aon, Barnett Waddingham, Cambridge Associates, Cardano, Hymans Robertson, Isio, LCP, Mercer, MJ Hudson Allenbridge, Redington, SEI and Willis Towers Watson. It aims to improve sustainable investment practices across the investment industry, unveiling six core commitments to drive that.
It will work to engage across a broad range of stakeholders, including asset owners, asset managers and regulators; seek investment outcomes that are genuinely sustainable and not treat sustainability as a tick-box exercise; align with and support industry bodies and initiatives; support clients that are too small to engage with industry initiatives; create a guiding set of principles that indicate good practice with practical advice; and be a body where regulators and other stakeholders can seek input when they need a view from investment consultants.
Willis Towers Watson global head of research Luba Nikulina said of the news, “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.”
As a critical link between asset managers and asset owners, the group said its members are optimally placed to promote a focus on sustainability which could ultimately help to drive greater change within the industry. Where there is already work under way by industry bodies, the group believes that input from its members could be even more impactful.
Joanne Job, Managing Director at MJ Hudson Allenbridge, added, “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.”