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Promoting long-termism

 

About


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.

In 2016, the Investment Leaders Group (ILG) issued its report Taking the long view: A toolkit for long-term, sustainable investment mandates. The report provided a toolkit which addressed 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.

In 2018, ILG’s members decided to extend this work by developing a tool – the Long-term Disclosure Framework – that could be used by institutional and retail investors, and by their advisors, to assess the long-term orientation of the investment funds that they are being offered. The intention is that the Long-term Disclosure Framework could also be used by asset managers when constructing long-term funds and when reporting on these funds’ characteristics.

Read the report here. 

 

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.

 

 

Applying the Long View to Investment Funds: Introducing the Long-term Disclosure Framework

Long Term Disclosure FrameworkIn this report, we first provide a short overview of the reasons why it is important for investors to take a longer-term approach to their investments. We then explain how we went through the process of developing and testing the Long-term Disclosure Framework. Finally, the report highlights the results and insights from applying the framework to a number of self-identified ‘long-term funds’, including an assessment of how the disclosures currently provided by these funds compare to the framework.

Visit the publication page to download the report.

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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