Consultants in the UK have updated their guidance for asset owners on how to assess ‘climate competency’.
The country’s Investment Consultants Sustainability Working Group (ICSWG) has identified tens of indicators that can help investors evaluate how sophisticated consultants are on climate issues.
Among the areas up for scrutiny are firm-wide expertise, individual expertise, tools and software, and policy advocacy.
For each of them, the guide outlines examples of good practice, and of market-leading practice.
Mette Charles, a member of the working group and the head of ESG research at Aon, said the guide was “designed to give asset owners of all profiles a reference point when thinking about ways to assess if their advisers are well equipped to support them on their climate journeys”.
The Climate Competency Guide was originally published in 2021 to recognise the role of consultants in helping investors keep on top of changing regulation and practices around the climate transition.
It also emphasised the need for consultants to understand the interplay between climate and other environmental and social issues that could present financial risks or opportunities.
ICSWG has consulted with UK asset owners to devise the update, and received feedback from trade body Pensions UK, the UK’s pension regulator and the Trustee Sustainability Working Group (TSWG).
It said in a statement that the latest version reflects the fact that “expectations that were previously aspirational are now generally considered a core part of investment consultants’ offerings”.
“Going forward, the TSWG expects to take a more active role in the periodic review and update of the Guide, to reflect evolving best practice,” noted ICSWG.
“We hope the refresh and fresh input from the trustee side helps to keep it relevant for asset owners in 2026 and beyond,” said Helen Prior, client director at Mercer and chair of the ICSWG workstream.
Bobby Riddaway, chair of the TSWG, said it was encouraging that many of the leading standards in the original guide were now considered to be business as usual, as the group wanted to see practices continuing to improve.
“At the TSWG, one of our goals is to focus on scalable solutions for all schemes so industry produced resources like this offer all trustees the ability to challenge and hold their advisors accountable.”
