The Investment Leaders Group Forum on 17 May 2016 aimed to explore the tangible, practical steps and commitments that investors can make to achieve a more responsible, sustainable and, ultimately, resilient financial system.
The ILG Forum was structured in two sessions. In the morning, senior sponsors of the ILG as well as a small number of additional firms interested in putting the ILG's work into practice, met to discuss the achievements and next steps of the group. In the afternoon, members convened with colleagues and guests to present the ILG's work.
Three of the workstreams were launched to the investment industry: Reporting investment impact; Mandates for long-term, sustainable investment; and Financial impact of carbon-related regulation. This follows the launch of The value of responsible investment in June 2014, Fiduciary duty in March 2015, and Unhedgeable risk in November 2015.
Keynote speakers
HRH The Prince of Wales
As a long-standing champion of responsible investment, CISL’s Patron, HRH The Prince of Wales, hosted the ILG’s inaugural dinner in 2013 and opened the Forum. The Prince reminded the audience that the ambitious action and innovations that are so urgently needed to get us to our destination as agreed by governments around the UN Sustainable Development Goals have to also come from the private sector and depend as well on the leadership by the investment industry.
"I hope you will share my commitment to a future in which we judge the performance of our investments not only by their financial returns, but by the way they add value socially and environmentally and in long term stability."
Read the full speech.
Philippe Zaouati
Philippe Zaouati, chair of the ILG and CEO of Natixis Asset Management’s subsidiary dedicated to responsible investment, Mirova, spoke about the role investors can play in contributing to the challenges of our generation.
Philippe also shared with the audience the key achievements of the ILG in its past three years to deliver its mission to help shift the investment industry towards long-term value creation.
"Finance is not neutral because the way markets invest global capitals impacts the course of our lives. Also, finance should not be neutral if it is to fulfil its role of serving the needs of our economies."
Read the full speech.
Corso Bavagnoli
Corso Bavagnoli, Managing Director in charge of the Financial Affairs department at the French Directorate General of the Treasury, spoke about France's adoption of the law on energy transition and green growth that requires investors to disclose how they factor ESG criteria and carbon-related aspects into their investment policies and how it may enable better-informed choices and pave the way to driving investments towards a low carbon economy.
Corso also provided his insight on how intergovernmental bodies in which France represented, such as the G20, are also looking into climate-related risk and impact.
For more details, read Corso’s presentation.
Corien Wortmann-Kool
Corien Wortmann-Kool is Chairman and president Board of Trustees of ABP, one of the largest pension funds in the world.
Corien spoke about the increasing interest of pension plan members in investment impact and ABP’s journey in meeting and exceeding their expectations.
For more details, read Corien’s presentation, A long-term horizon: Embracing the potential, a new responsible investment policy.
Members present the ILG work
The event launched three key outputs of the Investment Leaders Group.
Reporting investment impact
Amy Muska O’Brien, Managing Director and Head of Responsible Investment, TIAA Global Asset Management (TGAM); Hervé Guez, Director of Responsible Investment Research, Mirova (Natixis AM)
Amy and Hervé presented the work their organisations led together with Standard Life Investments (SLI), Zurich Insurance Group and other ILG members. Amy spoke about the opportunities for pension funds to work closely with their members to understand and respond to their interest in their investment contributing to social and environmental outcomes, and how the framework developed can contribute to that dialogue. Hervé presented the framework in further detail, highlighting its uniqueness in focusing on social and environmental outcomes, not financial materiality, in a way that is simple and relevant to beneficiaries and clients.
The result of the work was published in the report In search of impact: Measuring the full value of capital.
Mandates for long-term, sustainable investment
Jens-Christian Stougaard, Senior Vice President, PensionDanmark; Will Oulton, Global Head of Responsible Investment, First State Investment
Jens-Christian and Will presented the work they championed along with Zurich Insurance Group, Old Mutual Group and other ILG members on long-term investment mandates. They spoke about the process to identify the characteristics of mandates that encourage long-term, sustainable investment management, initially for active equities, and how these can strengthen investors ability to make capital work for the benefit of society.
The result of the work was published in the report Taking the long view: A toolkit for long-term, sustainable investment mandates.
Financial impact of carbon-related regulation
Euan Stirling, Head of Stewardship and ESG Investment, Standard Life Investment; Bozena Jankowska, Global Co-Head of ESG, Allianz Global Investor
Euan and Bozena spoke about the model their investment firms led together with SLI, TGAM and other ILG members. Euan spoke to the increasing need for investors to act on global warming and the need for investors to better understand how climate policy may impact their investments in the short-term. Bozena shared with the audience the drivers that led to Allianz Global Investors to be lead a pilot on modeling the financial impact of carbon regulation and later the value added of bringing the project to the ILG to develop it further collectively.
The result of the work was published in the report Feeling the heat: An investors’ guide to measuring business risk from carbon.
