When asked if they invest responsibly, most pension fund committees will inevitably respond positively. However, when asked to demonstrate evidence of what Responsible Investment (‘RI’) means for them, how they coherently implement allocations in line with that meaning, and how they know when they have achieved it, answers will often become vaguer, referencing allocations to specific ESG funds or voting policies without clarity of what these are actually expected to achieve.

This is not surprising and reflects a failure across an industry which has provided quick fix solutions to monetise trends without taking the time and energy to step back and understand what RI implementation means or develop the measures to understand success. This is evident in the growing number of RI investment solutions available with numerous ESG indices being available to invest against, but limited guidance as to how to bring these together into a coherent solution.

It's little wonder that committees can feel overwhelmed by choice and may end up implementing solutions in isolation, without consideration of the wider context or ambition. 

Clearer articulation and documentation of the actions pension committees are taking to address RI and climate issues is becoming more and more critical.  This serves not only to address the external scrutiny of press and pressure groups, but also to meet the evolving expectations of industry such as the new Stewardship Code and prospective Scheme Advisory Board Guidance on Responsible Investment, where greater focus is being placed on the outcomes achieved.

So, with this in mind, how do Committees and those supporting them avoid a scattergun approach?

Download our briefing note for more on:

• Framing an RI policy
• Developing and making use of investment beliefs
• Developing priorities
• Putting this into practice

Download our briefing note

If you would like to examine this approach in more detail or discuss how it could be applied to your Fund, please get in touch.