IAPF Spring 2018 Irish Pensions Magazine

48 | IRISH PENSIONS MAGAZINE | SPRING 2018 " ALISTAIR BYRNE HEAD OF EUROPEAN DC INVESTMENT STRATEGY STATE STREET GLOBAL ADVISORS come from threats outside of purely financial categories, such as extreme weather events, water and food crises, and the impact of climate change 1 . These risks also create opportunities for companies that can adapt to the changing economic landscape. Yet traditional investment analysis by itself may not adequately examine these non-traditional drivers of long-term performance. That’s why more investors are considering the impact of environmental, social and governance factors on a company’s long-term growth potential. At its core, ESG investing is based on the idea that environmentally efficient, socially responsible andwell- 1 The Global Risks Report 2017, World Economic Forum. Funds that consider environmental, social and governance factors can help members mitigate emerging risks and capture new drivers of long-term growth. Investors with long time horizons need to consider how the world may look tomorrow, not just what it looks like today. That can mean adopting new criteria to assess an investment’s potential performance — especially as our globalised, interconnected economy is increasingly affected by environmental, social and governance (ESG) issues that don’t readily show up on a company’s balance sheet. In fact, the World Economic Forum predicts that seven of the ten greatest risks facing people, institutions and economies over the next decade The Growing Case for ESG in DC Plans EXPERT OPINION