As an asset owner, you have the fiduciary duty to invest your members’ and clients’ savings responsibly with ESG principles to provide them with the monies they will need for retirement, to pass on to their beneficiaries or for any other life project that is important to them. You may manage these investments yourselves or call on the services of investment consultants and asset managers to do it for you.
From the hundreds of investment firms on the global market, how do you know which ones will optimise long-term financial returns without compromising on your extra-financial requirements?
I believe that the selection criteria should include the following:
- Asset managers who initiate, sign up to and genuinely implement responsible investment initiatives;
- Asset managers who require their portfolio companies to embed material extra-financial ESG (Environmental, Social and Governance) performance indicators into their business and remuneration strategies;
- Asset managers whose own pay practices reflect their responsible investment stance and performance.
A strong link between business, sustainability and remuneration strategies filters out the greenwashers who use ESG as a marketing tool and those firms who are genuinely committed to responsible investments to create sustainable financial returns as well as positive environmental and societal impact.