Investment consultants and ESG: An asset owner guide

Introduction

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Investment consultants and ESG: An asset owner guide

Investment consultants advise on how trillions of dollars are invested worldwide, but most consultants are failing to consider the role that environmental, social and governance (ESG) issues play in investment performance – despite growing evidence demonstrating the financial materiality of ESG issues to portfolio value.

Investment strategy

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:

Consultant’s organisational approach

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, ...

Manager selection

Manager selection is a core component of most asset owners’ investment process. Investment managers should either act in accordance with an asset owner’s investment preferences (if running a separate client account) or offer funds that can fit within the asset owner’s investment preferences, potentially in combination with others. Selections require ...