The previous sections of this report have focused on the advice on ESG matters that investment consultants provide to their asset owner clients and the questions that asset owners should ask on the subject. This section focuses on the investment consultant’s own organisational approach to responsible investment. That is, in making the decision to work with a specific investment consultant, asset owners need to be confident that the investment consultant’s organisation as a whole is committed to responsible investment. This requires that attention is paid to the role and responsibilities of senior management and to the manner in which individual employees (in particular the field consultants) are trained and incentivised.
Questions to ask the investment consultant
On governance and process
- Can the investment consultant describe its overall approach to integrating ESG issues and responsible investment into the client services and advice that it offers?
- If the investment consultant has a strategy or policy relating to incorporating ESG issues into its business practices, who has accountability or oversight?
- How does the investment consultant report on its responsible investment approach to the asset owner?
On resourcing and expertise:
- Does the investment consultant have a dedicated/ specialist ESG or responsible investment team? If so, how large is this team and how does it fit within the investment consultant’s organisational structure?
- What training programmes does the investment consultant have in place to ensure its approach to ESG issues and responsible investment is consistently applied across its service provisions to clients? What proportion of consulting/field staff have been trained on ESG issues over the past year?
- How does the investment consultant assess and monitor the competence and performance of its staff on the provision of advice on ESG issues and responsible investment?
- Does the investment consultant provide other advice on areas such as strategic asset allocation, ESG strategy, reporting and measuring ESG impact?
On the PRI Data Portal signatories can request transparency reports of investment consultants to query their organisational approach to responsible investment.
Investment consultants and ESG: an asset owner guide
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Consultant’s organisational approach