Taking into account all the trends uncovered in Step 1: Context, the organisation can begin to determine or realign its vision of how the world will develop, and define or reassert its mission. By doing so, the investment strategy that is developed and the investment decisions that it drives will be aligned with a clearly articulated purpose, and a shared view of the expected investment environment.

Board-level involvement

Defining an organisation’s mission and agreeing on the vision may require significant time, as it is critical to get full alignment from the board.

Vision of the future

Your vision of the future should encompass how traditional macroeconomic factors are reflected in your investments over time and your organisation’s expectations on:

  • society: an interpretation of broad trends from Step 1: Context, e.g. demographics, big data, rise of emerging markets, climate change, tax transparency;
  • beneficiaries/customers evolution: how needs and preferences will change for your beneficiaries/customers (e.g. changing expectations on flexibility of pension schemes (especially for defined-contribution plans), shift from demanding solely financial returns);
  • asset owner industry: how the role of asset owners will evolve, e.g. changing conceptions of fiduciary duty, long-term vs short-term focus, impact of regulatory changes;
  • investment environment transition: how global trends are shaping financial markets and investment expectations.


  • “We see the population becoming older, richer, and more focused on the long-term social and environmental impact of their actions. We see the asset owner industry dividing into concentrated big players on one hand and fragmented small players on the other. We see regulations evolving to encourage the asset owner industry to hold financial and other positive impacts for people and/or planet as dual objectives. We see the economy experiencing long-term stagnation as growth in China slows and climate change adversely impacts developing economy outlooks, leading to lower financial returns for extended periods.”


A mission statement puts into words your organisation’s reason to be. An asset owner’s mission includes how the organisation will serve its stakeholders (e.g. beneficiaries/customers, employees, society), as well as an explicit (or implicit) differentiator against industry peers. The freedom the organisation has to formulate a mission statement will vary, e.g. some defined-benefit funds including public pension funds can be tightly restricted and/or regulated, whereas other funds have a wide range of options.


  • “Securing the financial future and sustaining the trust of California’s educators” (CALSTRS)

  • “We empower entrepreneurs to build a better world” (FMO)

  • “We have a strong focus on responsible and sustainable investment, as we consider environmental, social and governance factors create real risks and opportunities for the Scheme, particularly given its long term nature.” (EAPF)

  • “Our overarching goal should be to achieve the investment returns required for the public pension system with minimal risks, solely for the benefit of pension recipients from a long-term perspective, thereby contributing to the stability of the system. […] By fulfilling our stewardship responsibilities, we shall continue to maximize medium- to long-term equity investment returns for the benefit of pension recipients.” (GPIF)

  • “Paying pensions today, preserving pensions for tomorrow.” (OPTrust)

  • “Because pensions are very long-term investments, ERAFP has positioned two concerns at the heart of its governance: preserving intergenerational fairness and overseeing the sustainability of its management. ERAFP’s board of directors therefore ensures that the benefits being paid out today are not detrimental to the interests of tomorrow’s beneficiaries.” (ERAFP)

Topics to consider

  • How is society evolving? What will be the high-level effect on your portfolio? What changes will occur to get to that expected future? How will these changes affect e.g. different asset classes?

  • What ESG factors do you expect to be/not be materially important for which asset classes, assets, types of portfolios? How is it different to today and/or the past? You may want to focus more on portfolio-level impact or on individual asset classes, depending on whether the organisation manages assets in-house or outsources.

  • What specific trends can the organisation most positively impact/benefit from?

  • What will the role of investments be in the real economy?

  • Other…

  • How will the views/needs/desires of beneficiaries/customers (and other stakeholders such as employees) evolve?

  • What will beneficiaries/customers expect in terms of transparency?

  • What will beneficiaries/customers expect in terms of incorporation of ESG factors?

  • What will beneficiaries/customers expect in terms of positive impact by the asset owner?

  • What are beneficiaries/customers’ views on balancing purely financial with other objectives

  • Other…

  • What changes will occur in the asset owner industry?

  • What are the overall asset owner market dynamics?

  • How do your existing investments align with your current vision of the future?

  • Will automated systems displace asset owners or asset managers, or significant parts of their existing activities?

  • Will asset owners be evaluated according to their level of focus on ESG factors?To what extent will fiduciary duty continue to include responsibility for broad societal interests such as combating climate change, social inequality, etc.? Is your current view aligned with the current understanding/interpretation of fiduciary duty?

  • Other…

  • Do you have organisational readiness to respond to global transitions (for example board expertise on low-carbon transition)?

  • What macro trends can you influence?

  • What regulatory developments are likely, or possible? Do you expect policy makers to require the investment management industry to consider ESG factors more?

  • Do your actuaries account for transition risks?

  • Is your portfolio in optimal condition for physical climate and weather-related events and/or liability risk arising from those disruptions?

  • Is your portfolio discounting transition risks that could arise from adjusting to a low-carbon economy (changes in policy, technology, investor sentiment, etc.)?

  • Other…

  • Do you have a mission statement? What role do you want the organisation to play in the world? What do you want the organisation to be known for?

  • How do your existing investments align with your current mission?

  • How much room does your mandate allow in crafting a mission statement?

  • Does your mission distinguish you from your peers?

  • Have you considered the extent of your fiduciary duty beyond providing strictly financial benefits to stakeholders?

  • Are positive impact on people and/or the planet part of your primary objective?

  • What added/societal value do you want to offer?

  • In which areas of impact investing do you want to play a leading role, and in what way?

  • How do your various stakeholders perceive your mission?

  • Other…

Actions and roles

  1. Project sponsor holds planning session with project lead and board/trustees.

  2. Project lead collects (through interviews and focus groups) views on existing vision and mission, from board/trustees, C-level executives, stakeholders such as beneficiaries/customers and outside experts/thought leaders.

  3. Project team conducts a peer review of vision and mission.

  4. Project sponsor may hold vision and mission workshop/s with key stakeholders. Project team should report on current vision, mission and input gathered.

  5. Project sponsor holds sign-off meeting with board/trustees where board is given opportunity to voice final input, questions, and thoughts regarding vision and mission, before approving.

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    How to craft an investment strategy

    March 2018