Sustainability and Responsible Investment

Sustainability and the investment management industry
As stewards of our clients’ assets, investment managers have taken responsible investment approaches for many years – approaches that consider environmental, social, and governance (ESG) criteria in their investment analysis and decisions. The aim: to achieve better long-term returns for clients.

There has never been a greater focus on how well investment management firms deliver for their customers, and for the wider economy.

We’re seeing three major drivers in sustainability for investment management:

Helping clients achieve their investment goals. Our fundamental role as investment managers is to help savers and investors achieve their investment goals – whether financial or non-financial. And, recently, policymakers have become more interested in how investment managers can help investors achieve their non-financial goals.
Industry-led innovation and competitiveness. There’s no one-size-fits-all approach to responsible investment. It’s an evolving, growing, dynamic market with diverse approaches, investment strategies, and a range of investment products designed to meet different responsible investing goals. While different policy and regulatory initiatives focus on different aspects of the sustainability and responsible investment agenda, it’s important to the industry that the collective impact of different regulations is not to limit innovation or investor choice.
Policymakers requiring disclosure of sustainability information. Senior policymakers and the public are increasingly aware that all investments have some impact on society and environment – negative or positive, intentional or incidental. With this in mind, investment managers are being required to disclose how their investments measure up against sustainability indicators across their full range of investment strategies. We’ll need to work closely with governments and regulators to achieve useful and comparable disclosure methodologies against wider sustainability indicators or measurements.

The Investment Association’s industry-led initiatives

At the IA, we’re working closely with our member firms to promote responsible investment. Above all, we’re helping firms think about their wider role in society and the environment.

Our work has focused on the following:

Supporting the development of climate-related disclosure to bring greater clarity and comparability to the different responsible investment approaches our firms carry out.
Improving how our firms communicate the ways in which they take sustainability matters into account.
Supporting Race to Zero and the Net Zero Asset Managers initiative to help investment managers deliver on their net zero ambitions. To date, IA members responsible for more than three-quarters of UK assets under management (£7trn) have signed up to the Net Zero Asset Managers initiative.
Working together with UK Government to bring about transition by creating investible opportunities like the UK sovereign green bond and setting out sector-specific pathways for transition.