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.

Step 1 – Fiduciary obligations

Step 2 – Investment principles and beliefs

Step 3 - Strategy formulation

Step 4 - Investment policy and governance

References

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

Topics

Investment consultants and ESG: an asset owner guide