Investment Consultants Sustainability Working Group launches a trustee guide for assessing consultants’ climate competency

1 February 2021

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 competence.

Five themes

The guide sets out five themes against which trustees should expect their investment consultants to demonstrate their climate competency. These are:

1. Firmwide climate expertise and commitment
2. Individual consultant climate expertise
3. Tools and software (to support climate-related risk assessment and monitoring)
4. Thought leadership and policy advocacy
5. 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.