Chief Investment Officers should be more vocal about environmental, social and governance (ESG) topics, instead of leaving it to their responsible investment teams.
That was one of the key findings from an asset-owner project on the future of responsible investment (FoRI), led by 20 senior figures from pension funds, insurers and endowments from around the world.
The group was convened by the Principles for Responsible Investment (PRI) last year, to help it develop a new strategy.
Members include Allianz executive Günther Thallinger; Sandra Carlisle and Ian Burger, the heads of responsible investment and stewardship at the Universities Superannuation Scheme; and Michael Nellemann and Mads Skaaning Jensen, PKA’s CIO and head of fixed income and ESG, respectively.
Big names from Caisse des Dépôts, Folksam, Railpen and the Church of England were also involved.
Together, they identified five ways in which asset owners can support future progress, including by “increasing CEO and CIO visibility in advocating for responsible investment”.
“FoRI discussions saw value in CIOs of asset owner organisations playing a more active and visible role in advancing responsible investment priorities,” the group said in a report published on Tuesday.
The PRI should set up “regular and formal channels for asset owner input, particularly from CIOs, executives and board members (not just responsible investment teams),” it suggested, adding: “As a starting point, the PRI may consider conducting a quick assessment of where and how CIOs are currently engaging.”
“This could inform the creation of dedicated contribution opportunities and events which centre around concrete and relevant topics, helping to sustain and enhance CIO engagement.”
Other recommendations included more coordination among asset owners on core topics, more transparency about why certain investment managers win mandates, more concerted policy engagement, and a greater emphasis on financial innovations, including the development of blended finance products.
The FoRI group also identified five themes it expects to be “priority areas for asset owners over the next 20 years”.
They included climate change, nature, changes to demographics and employment conditions, geopolitics and democracy, and the governance of artificial intelligence and the digital transition.
“Investors could consider collaborative funding” for scientific and academic research to support their work on these issues, the report suggested.
It also asked the PRI to consider collaborating more formally with the Taskforce on Nature-related Financial Disclosures and the International Sustainability Standards Board “to ensure consistency and interoperability”.
The PRI said all the recommendations, which were informed by 100 additional organisations outside the FoRI group, would feed into its 2027-2030 strategy.
“The themes identified will be further explored through our strategy consultation with signatories this year,” it explained.
