An asset owner’s overall investment process starts with crafting an investment strategy. Asset owners will aim to set out a clear and explicit investment strategy that comprehensively considers:
A. the full range of short-term and long-term return factors (e.g. social, technological, economic, environmental and political/regulatory) affecting their portfolios; 5
B. the legal obligations, including fiduciary and other duties, on the asset owner and on the individuals charged with overseeing and managing the assets;
C. how the asset owner can operate as effectively and efficiently as possible for its beneficiaries and for its other stakeholders.
Setting up a diverse internal responsible investment working group and undertaking a thorough peer group analysis are important steps for an asset owner new to responsible investment. Investment consultants should be able to provide valuable guidance on these steps.
5 For a detailed listing of the topics and themes that might be considered, see PRI (2018), Asset owner strategy guide: How to craft an investment strategy
Investment consultants and ESG: an asset owner guide
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