MANAGING THE EVOLVING RELATIONSHIP BETWEEN ESG CONSIDERATIONS AND INVESTMENT DECISION-MAKING, PRODUCT CLASSIFICATION AND DISTRIBUTION
There has been a material shift in investor appetite for ESG-aligned investing in recent years, with asset owners and asset managers increasingly committing to global initiatives such as the UNPRI and the UN SDGs, alongside a visible shift in retail demand for sustainable investment. These developments present an opportunity for asset owners and asset managers to adopt a clearly defined position on ESG and the role it plays in their investment decision-making processes.
The evolving relationship between ESG considerations and investment decision-making, product classification and distribution is significantly affecting the funds and asset management industry. Asset owners and asset managers are increasingly being required to consider the ESG dimensions of any proposed transaction or investment decision, to ensure that sustainability risks are adequately considered and that consistency with the ESG preferences of their underlying clients or beneficiaries is ensured. The considerations of ESG issues has, therefore, changed from a ‘compliance’ exercise to a core ‘business’ consideration for asset owners and asset managers.
We have considerable experience assisting asset owners and asset managers to respond to the impact of these developments across their businesses, from advising on strategic and operational considerations at an organisational level to helping them launch or invest in ESG-related strategies.