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Promoting long-termism

The Investment Leaders Group (ILG) has developed a toolkit to help investors design or assess investment mandates and strategies that can make a particularly strong contribution to long-term, responsible and sustainable investment (LTRSI).

Our aim is to design, promote and adopt mandates that align the long-term interests of asset owners with the activities of their investment managers.

 

The toolkit for long-term sustainable investment mandates


Short-termism in financial markets has been widely identified as a cause of underinvestment, economic inefficiency and poor decision-making by corporations, undermining long-term value creation. To address this, the ILG, in cooperation with the University of Cambridge Institute for Sustainability Leadership (CISL), prepared a toolkit, which identifies a set of ten elements for investors who wish to design investment mandates that can help shift the investment chain towards responsible, long-term value creation.

Our toolkit addresses active listed equity mandates, both because they form an important part of asset owners’ portfolios and because they give investors post-investment rights as share-owners and opportunities to influence company behaviour through voting and ongoing stewardship activities.

 

Click to download as a pdf.

 

Further details


The framework was originally published in 2016 as Taking the long view: A toolkit for long-term, sustainable investment mandates, and outlined a set of 10 design features which can be adjusted to deliver varying ‘strengths’ of LTRSI in an investment strategy and mandate to suit an asset owner’s particular circumstances. The approach focuses on investment time horizons and the extent to which sustainability factors are embedded in the investment process.

Taking the long view: Long-term, sustainable investment mandates.

Long view wide

Short-termism in financial markets has been widely identified as a cause of under-investment, economic inefficiency and poor decision-making by corporations, which undermines long-term value creation.

This work explores how long-term, sustainable investment practices can be delivered through investment mandates.

Visit the publication page to download the report.

 

 

Next steps


Going forward, the ILG seeks to develop a long-termism scorecard that can help asset owners assess a fund’s long-term orientation as well as enable asset managers to review their own performance.

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Members

Investment Leaders Group members. Cambridge Institute for Sustainability Leadership.

 *HSBC Bank (UK) Pension Scheme

Contact

Faty Dembele letterbox

Faty Dembele, Senior Programme Manager, Investment Leaders Initiative