ESG: All the rage?

A flood of press releases has hit the desks of Funds Europe talking about firms signing up to the UN Principles for Responsible Investment, our colleagues there tell The Lens.

The flood would seem to be a further sign of how responsible investing has gathered so much pace now that it has become mainstream. Long gone are the days when ethical FTSE 100 funds were the only offering. But has the issue of responsible investing really shifted so much when earlier this year a House of Commons environmental audit committee concluded that some top UK pension funds were “worryingly complacent” about the issue of climate change?

A pension fund consultant raised this point at a recent CAMRADATA roundtable on climate-related investment. The discussion was considering how the financial implications of climate change could become an important consideration to more than just the 5% of 1,241 European pension schemes that Mercer surveyed earlier this year.

CAMRADATA held the roundtable in London and an edited version of it will appear in Funds Europe in September.

To really make climate-change risk a central tenet of broader investment risk management, investment consultants must mainstream it; in other words, they must treat climate change as a normal part of the risk management process and not – as is the case with some – bill it as an extra piece of work for those who request it. Doing that could change 5% to 100% over night.