This webinar explores why investing with impact is a smart decision for your pension fund and how pension funds can start thinking about making a change while delivering substantial financial return, today.

The session was hosted by the Impact Investing Institute’s CEO Sarah Gordon, in discussion with Emma Howard Boyd, Chair of the Environment Agency, which successfully runs a pension scheme with a strong focus on responsible and sustainable investment, and David Blood, co-founder and Senior Partner of Generation Investment Management, who has 16 years of experience in successful sustainable investment.

Key messages from the discussion

  • Evaluate the meaning of fiduciary duty to embed sustainability. Sustainability, environment and climate change are critical factors for long-term success and it is the fiduciary duty of a pension fund to consider factors relevant to long-term success. Moreover, considering these factors makes the investment analysis holistic, using a broader lens when making decisions on capital deployment. The goal is not just to consider sustainability as ‘allowed’ within fiduciary duty, but to establish that not considering sustainability would be in breach of fiduciary duty. 
  • Engage with stakeholders. This includes having the right conversations with trustees, engaging with beneficiaries – understanding what is important to them; building partnerships with asset managers – having conversations on how to meet fiduciary duty and sustainability goals and helping early adopters launch their sustainability strategies; engaging with investee companies – asking them the right questions to make the investment process holistic; and engaging with policy makers and institutions.
  • The business case for sustainability sits alongside the need to build resilience. Sustainability and ESG are not about trading value for impact. The investment process for sustainability involves clear investment-oriented questions and rigorous risk analysis, for example the resilience of infrastructure investments so buildings or roads are not washed away by a flood. So, sustainability and ESG considerations are not about settling for the third quartile, rather, they can deliver the top decile. Yet, absolute win-win situations are rare and there are trade-offs; sustainability is difficult to achieve and difficult to measure. Therefore, pension funds need a proper framework and long-term objectives, while also being humble enough to recognise their mistakes and learn from them.  

Audio recording

Video recording