Sustainability and climate change
Sustainability is an area that continues to grow in significance for the industry. While broad, it is an area we are well-placed to tackle, given our past work and current passion. Well-attended sustainability summits in London and Melbourne led to the creation of a very comprehensive action blueprint for the whole investment industry and the Institute.
Our first area of focus will be the +1.5C portfolio with the aim of identifying the key characteristics of the future economy (and hence the future investment opportunity set) that are consistent with global warming of no more than +1.5C above pre-industrial levels. This, of course, defines a destination rather than necessarily telling us how we can get there. But it is a destination that we consider has been inadequately articulated so far. We expect to build on this work in a number of ways eg the implications for how the fiduciary role is defined, for stewardship and corporate governance responsibilities and for other aspects of the investment process.
The power of culture
We plan to build out our work on culture and have launched a global peer study on investment culture, leadership and diversity. This study aims to improve the narrative on culture; to formalise ways that culture can be measured and managed; to explore the idea of ‘culture by design’ and to make the link between strategy and culture more tangible and achievable. This follows our recently updated paper: The impact of culture on institutional investors.
The total portfolio approach (TPA)
The TPA working group continues to build on the findings of a global peer study into the asset allocation practices and aspirations of leading asset owners, including the TPA approach to portfolio construction. To progress the TPA concept further we are planning to host a symposium, built around the group’s conclusions, on Wednesday 11 March in Sydney.
The Institute has been researching, and involved in, the universal ownership conversation for a number of years and we will launch a survey on the subject early in 2020. We hope to use the results of the survey to inform a summit planned to be held in Cambridge in May 2020. Look out for more details on this research and event.
If you are a member and would like to find out how to get involved with our research agenda, just click here.