IAPF Spring 2018 Irish Pensions Magazine

IRISH PENSIONS MAGAZINE | SPRING 2018 | 7 " ANDREW HOWARD HEAD OF SUSTAINABLE RESEARCH SCHRODERS façade than on the tangible investment implications. Third- party environmental, social and governance (ESG) ratings continue to dominate investors’ tool kits, rather than the thoughtful innovation needed to understand, measure and manage the risks and opportunities presented by structural changes in global industries. We believe such superficial responses will prove insufficient. Asset owners need to focus on understanding the role managers expect ESG analysis to play in their investment processes, the analysis they apply, the consistency and depth of their engagement and voting and their ability to demonstrate the impacts of those activities. At Schroders we are Sustainable investing is not new, but it has expanded from the fringes to the forefront of the investment industry over the last decade. That growth is reflected in the rise from fewer than 50 asset owners and managers at the launch of the Principles for Responsible Investment in 2006, to almost 2,000 signatories today 1 . The relationship between financial markets and increasingly bewildering social change or intractable environmental challenges is well recognised. The challenge lies with translating that recognition into thoughtful and considered action. To date the investment industry has focused more on the marketing 1 https://www.unpri.org/directory/ Sustainable investing demands more than off- the-shelf answers EXPERT OPINION