Embedding sustainability considerations into investment decisions
Embedding sustainability into the investment decision-making process of a pension scheme is essential for effective risk management, innovation and return on investment. A4S’s ESG Toolkit for Pension Trustees contains a maturity map, guidance, case studies and third-party resources to help trustees navigate the key challenges and maximize opportunities when integrating the considerations into investment allocation decisions.
The ESG Maturity Map can help you, as a pension trustee, benchmark your current integration of sustainability within your strategic and investment decision-making processes against current best practice. It also suggests practical steps that you can take to progress. Many trustees have also used this maturity map to:
- Achieve consensus across the board of trustees on where their priority actions should be around investment selection and risk management.
- Understand where they are, in relation to other schemes.
- Challenge and probe further into responses from their advisers and managers on sustainability-related activities.
These guides have been written for trustees and include insights from peers with suggested practical steps and ‘top tips’. They are designed to support trustees when conducting in-depth discussions on sustainability considerations with their service providers and internal colleagues. The resources complement more granular work done on the same topic by other organizations, which can be found in the external resources section below.
Embedding ESG into asset class portfolios
Our case studies capture the 'what', 'why' and 'how' to embed sustainability into the decision-making processes of a pension scheme, across particular challenges. Topics include: setting a net zero investment strategy, considering climate in the employer covenant process, and dedicating assets to sustainable outcomes. The practical steps taken and top tips suggested are often transferable to large and small pension schemes from different jurisdictions.
This is not an exhaustive list, but we find that the resources below complement this section of the toolkit.