By Will Bugler
The Investment Consultants Sustainability Working Group (ICSWG) has launched a guide to support trustees to assess their investment consultants on their climate competency. The ICSWG is a collaboration between 17 firms formed in 2020 taking action to support and accelerate sustainable investment initiatives in the UK.
Developed through collaboration between all 17 member firms
with input from ShareAction, The Pensions Regulator and the PRI, the guide is a
practical response to the 2020 Pensions Climate Risk Industry Group (PCRIG)
consultation, which recommended that pension scheme trustees require their
investment consultants and asset managers to demonstrate climate
The guide sets out five themes against which trustees should expect their investment consultants to demonstrate their climate competency. These are:
- Firmwide climate expertise and commitment
- Individual consultant climate expertise
- Tools and software (to support climate-related risk assessment and monitoring)
- Thought leadership and policy advocacy
- Assessment of investment managers and engagement with them
Examples of ‘positive’ and ‘best practice’ indicators are proposed for each theme to help trustees assess their consultants in each area, underscoring the commitment of the ICSWG to ongoing improvement of climate change practices.
“The indicators are deliberately stretching with the aim of raising investment consultants’ standards and it should be acknowledged that some of these indicators will be aspirational.” Said Luba Nikulina, of Willis Towers Watson and co-Chair of the ICSWG. “However, this is an important step towards developing good practice and practical guidance for schemes, in particular those seeking to align with the recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD).”
Download the “Guide for assessing climate competency of Investment Consultants” here.