Sustainability Community

 View Only
  • 1.  Asset Owners commit to Sustainable Investments?

    Posted 22-02-2024 11:03
      |   view attached

    Good morning community,

    When I talk to members of our community, many express the wish to meet more of asset owners and hear from them on their strategies around sustainable investments. Hence, we are going to have an online meetup at the end of March focused on that  - watch out for the announcement in the "events" section soon.

    I found this interesting global survey from FTSC Russel which they have done for the last 5 years looking at whether or not asset owners commit to maturing sustainable investment strategies. The findings of this survey are attached here. Key takeaways include:

    • After 5 years of steady growth, sustainable investment registers a slow down in terms of implementation and evaluation
    • Bariers to increased sustainable investment adoption are still apparent but on a downward trend
    • Governance themes are the priority having significantly risen across all regions
    • Top rationale for implementing sustainbale investment is mebmer or client demand

    It would be great to hear from our members from asset owner companies or others on what they are observing and if they feel that barriers to sustainable investments are on the downward slope?

    Aya Pariy

  • 2.  RE: Asset Owners commit to Sustainable Investments?

    Posted 22-02-2024 12:57
      |   view attached


    I attended a half day event around Fiduciary Duty aimed at Pension Funds and much of the discussion was around how trustees address the issue of impact from their funds and what their duty is and how to think about it following the Financial Markets Law Committee report on Fiduciary Duty and Sustainability.

    For Asset Owners there is a learning curve to understand the impact they could have, to discover their own priorities. and values and then have a strategy to invest to meet their intentions.  They have to overcome product and mindset inertia among intermediaries to achieve their intent.  For now there is a real spread from zero awareness to very awake and focused asset owners. 

    Some great input but one thing that is apparent is that Fiduciary Duty is a legal or contractual concept and for Asset Owners if they are the beneficiaries they have a lot of freedom but if you are an intermediary i.e. trustee or manager you are interpreting contracts legal obligations and the degree to which you can exercise judgement and then how you record explain and report decisions as an agent in the chain between Asset Owner and actual investment instruments and portfolios.

    Big Caveat in translating how to incorporate Sustainability into investment work for other parts of the financial industry and to other Asset Owners is their context and mission maybe materially different from that of a Pension Fund Trustee.

    Comments from different Asset Owner perspectives would be interesting to hear.

    Insurance Companies
    Sovereign Wealth Funds
    Active Mutual Funds
    Passive or ETFs

    I attach a copy of the paper to this post and a link below to the FMLC web site Report posting

    Pension Fund Trustees and Fiduciary Duties: Decision-making in the context of Sustainability and the subject of Climate Change"

    Given it tries to offer guidance and had a lot of lawyers inputting their current views into the committee it is surprisingly readable and might be helpful as a thought provoking paper.