So, it is important to understand what they have designated themselves and why. I have heard about someone who every investment they make must correlate with one of the Sustaina- ble Development Goals. They invest in McDonald’s, which they said alleviates global hunger. That is how ridiculous it can be. So, it is important to meet your managers regularly to understand how they are thinking. Cole: I agree, but pension schemes worth less than £20m do not have the time, or necessarily the knowledge, to do that. Rawson: It is the role of the consultant to bring clarity and filter out the noise…and there is no shortage of noise. Abbie Llewellyn-Waters: The investment consultant plays an important role for resource constrained smaller schemes. There are industry standards that are helpful also, including UN Principles for Responsible Investment ratings of invest- ment managers. Interestingly, the UK Stewardship Code has recently reviewed its signatories and removed a third for not


meeting the requirements. These are helpful industry over- sight mechanisms which smaller schemes can also consider. The Institutional Investors Group on Climate Change also keeps a list of asset manager net-zero commitments. In that list there are wide spreads of assets under management allocated to decarbonising portfolios in line with the Paris Accord, ranging from 1% through to 100%. Typically, specialist houses achieve 100% of assets under management alignment. When asset managers have broad product range across asset classes of fixed income, equities and alternatives it is more challenging to deliver. We have allocated 42% of our assets to align to net zero across our developed equity range. That is one of the highest align- ments in the initiative for broader asset managers. The tools and transparency are improving. The Task Force on Climate-Related Financial Disclosures (TCFD) becoming man- datory across the G7 in the coming years will help standardise


Feb 2022 portfolio institutional roundtable: Sustainable investing 9


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