According to the headlines, sustainable investing is out of favour.
The SEC issued guidance on investor activism which caused BlackRock and Vanguard to pull out of company meetings. Azoria Partners expects to launch a fund threatening to punish ‘woke’ companies. And the Net Zero Asset Managers initiative ceased activities on the back of an exodus of US companies.
But among UK pension schemes, sustainable investment remains an important trend.
Amundi and Invesco recently won a £28bn mandate from The People’s Pension with State Street sidelined. According to TPP, both appointments “represent a step forward in achieving greater alignment with The People’s Pension’s stewardship approach and priorities” and will allow it to continue to evolve these high standards.
Spend any time talking to the industry and this view is reinforced – UK asset owners remain committed to sustainable investment and they want partners who can match that vision.
Opportunity knocks
The growing polarisation between the US and the UK’s attitudes towards sustainable investing is a growing headache for global asset managers who are struggling to keep two different audiences happy.
For European and UK asset managers whose sustainability ethos runs through their business the same way the word ‘Blackpool’ runs through a stick of rock, this shifting landscape represents an opportunity.
With pension schemes and insurers looking for managers whose philosophy and vision aligns with their own, a mega-manager void has emerged which needs to be filled by sustainably-focused asset managers
Communication is key
It’s not enough to do sustainability well – you need to talk about it well too. If you don’t, you risk losing business to those who do it badly but talk about it well.
From two decades of talking to everyone involved in the investment chain – managers, advisors and asset owners – we’ve learnt credibility starts at the top with clarity from the executive board.
Those conversations showed us that sustainable vision needs to be embedded in a business’ culture to ensure employees embrace the philosophy.
Communications need to be top notch to cement the culture and explain the philosophy to clients. And you must be consistent – you should be prepared to walk away from products which don’t match your vision.
You can only be a credible sustainable investor if you have all four Cs of sustainable investment – clarity, culture, communications and consistency.
Moore Squared Communications runs a series of workshops to explore sustainable investment in greater detail – get in touch if you would like to attend!
