Institutional Investors
The inherent long-term investment time horizon and the diversified portfolio structures are important enablers of ESG for institutional investors, from pension funds to academic endowments.
The majority of institutional investors have a general ESG policy in place, with the intention to achieve better financial returns and bolster their risk management capabilities.
As the market matures, ESG factors are being applied to a wider range of asset classes and investment products. They can be systematically incorporated into broad investment portfolios and strategies. A spiraling number of regulatory frameworks is also impelling institutional investors to integrate ESG practices and report them to stakeholders. Showing commitment to sound and responsible investment practices is no longer a reputational issue but a compliance one. There is a growing market understanding that failing to consider long-term investment value drivers in investment practice — including environmental, social, and governance issues — is a failure of fiduciary duty.
Yet, surveys indicate that institutional investors still lack understanding of the sustainable finance ecosystem and its various dimensions, and have difficulty in selecting top-notch fund managers with a good ESG track record.
Comprehensive services for institutional investors
Diagnosis and Roadmap
Assessing current investment practices, portfolios, and data usage in all business units and their connection to ESG, alongside mapping of executives’ knowledge, expectations, and fears on responsible and sustainable investing. Conducting a gap analysis and designing a tailor-made roadmap for our clients to take full advantage of ESG opportunities. When suitable, we also develop internal and gradual buy-in strategies.
ESG Architecture
Integrating ESG practices in internal processes, which includes designing ESG policies, strategies and implementation guidelines; adopting firm-wide commitments and metrics; adjusting org-charts; applying ESG principles and metrics in HR (hiring, managing, training, assessing and compensating staff through ESG lenses); integrating ESG in foundational documents (legal and marketing); developing stakeholder identification and engagement frameworks; and bolstering internal capabilities through educational programs.
Money Management
Incorporating ESG factors and practices into strategic asset allocation. This is followed by the sourcing, contracting, and monitoring fund managers according to ESG lenses. When suitable, we also advise on the adoption of active ownership strategies.
Outreach and Communication
Communicating ESG policies, strategies, and outcomes internally and externally through international reporting frameworks. Given the breath and the overlapping nature of the global ESG industry, we also design global outreach strategies, helping our clients in selecting the initiatives, associations, frameworks, awards that represent a better fit with their objectives.
Building Synergies
Establishing coalitions of mission-aligned institutional investors to expand capital allocations into specific sectors or under specific guidelines.
Global benchmarking
Conducting data-driven and bespoke studies on the global ESG industry, covering trends, standards, regulatory frameworks, practices, benchmarks, players, initiatives, associations, gaps, and opportunities.
