《德勤:2023绿色发展绝非易事:切实管理可持续投资转型报告(英文版)(17页).pdf》由会员分享,可在线阅读,更多相关《德勤:2023绿色发展绝非易事:切实管理可持续投资转型报告(英文版)(17页).pdf(17页珍藏版)》请在三个皮匠报告上搜索。
1、Dedicated sustainable investing will more than quadruple in size,totaling$13 trillion in assets under management worldwide,by 2025.Dedicated sustainable investing represents an evolution,as these portfolios actively promote environmental,social,and/or governance characteristics as a primary investme
2、nt objective,rather than only considering such factors as one of many of investment inputs.The future of dedicated sustainable investing will be:Global in nature:EMEA sustainable assets will rise to$9.5 trillion from$2.2 trillion,US assets will expand to$2.5 trillion from$400 billion,and APAC will s
3、well to$1 trillion from$200 billion.Accelerated by conversions:Nearly half of the growth worldwide will come from converting existing strategies to sustainability-focused investment processes.Fueled by investor demand:Investors are expected to drive$3.2 trillion in net new flow into sustainable stra
4、tegies by 2025.Clarifying a firmwide approach to sustainable investing is critical to investors,regulators,and internal leadership.By 2025,a plurality(39%)of global assets will belong to firms that use their own sustainability commitments to guide investment decisions.As asset managers worldwide dev
5、elop perspectives on sustainable investing,they will coalesce into four archetypes:ESG integrators using ESG data as one of many portfolio inputs,but offering little to no dedicated sustainable investing;firms adopting this approach currently account for 49%of industry assets,but will fall to 34%by
6、2025 Client-led ESG solutions providers selling dedicated sustainability options,but leaving discretion fully with the client;these managers represent 43%of assets today and will fall to 25%by 2025 Goals-oriented ESG outcome providers,where investment and enterprise decisions are defined by a clear
7、set of sustainability commitments;this will be the fastest-growing archetype,with asset share of these firms rising from 8%to 39%by 2025 “Sustainability purists,”where sustainable investing is the core competitive advantage;this will comprise only a handful of boutique firms both now and by 2025Sust
8、ainable investing leaders will require five characteristics.Clear vision regarding sustainability Compelling sustainable investment product offering Credible integration of ESG and sustainability into investment processes Outcome-focused active ownership and stakeholder engagement Insight-led client
9、 engagementand will need to make changes to their operating model in three areas to support their sustainable investing approach:Governance and organizational design Data and technology Talent and incentivesIts not easy being greenManaging authentic transformation within sustainable investingIts not
10、 easy being Quirk,a practice of Deloitte Consulting,is the largest management consultant in the world focused exclusively on strategy advice to asset and wealth managers.Our global team combines unparalleled industry strategy and implementation experience,proprietary research,and proven solutions fr
11、ameworks to deliver value in a rapidly evolving environment.Our core consulting assignments include broad business strategy reviews,investment positioning and strategy,market opportunity evaluations,organizational design,ownership and incentive structuring,transaction due diligence,and postmerger in
12、tegration.In conjunction with Deloitte,Casey Quirk offers the most comprehensive end-to-end consulting solution in the industry.Table of contentsIntroduction.3Global growth in dedicated sustainable investing.4Creating an authentic vision for sustainable investing.7Key attributes of sustainable inves
13、ting leaders.8Operating model changes for sustainable investing leaders.14Conclusion.16AuthorshipPrimary coauthors:Alyssa Buttermark J.Tyler Cloherty Benjamin F.Phillips Casey Quirk principals:Yariv Itah Jeffrey A.Levi Benjamin F.Phillips Kevin P.Quirk Jeffrey B.Stakel Amanda K.Walters China contact
14、sJason GElsie ZRoger WRachel HKatie CJenny YBlack FIts not easy being green shorthand for environmental,social,and governance factors in investing,is a broad label differently defined by various asset management industry stakeholders.A lack of definitional clarity leaves key stakeholders with questi
15、ons around the size of the shift,and the reaction speed required to address it.Catalyzing a discussion about ESG must begin by getting the entire leadership team on the same page regarding the scope and specific actions that distinguish different approaches to ESG.This paper focuses on dedicated sus
16、tainable investments,a subset of ESG portfolios that promote ESG characteristics as a primary objective of the investment process.For a look at the wider ESG universe,you can read more in the Deloitte Center for Financial Services paper Advancing environmental,social,and governance investing.There a
17、re three primary categories of dedicated sustainable investments:Exhibit 1.Defining dedicated sustainable investingThis paper will provide insight into four key topics:Expected expansion and growth drivers of dedicated sustainable investing Four ways asset managers can define their sustainable inves
18、ting vision and strategy Key attributes sustainable investment leaders will require to compete Operating model enhancements that sustainable investment leaders will need to implementCasey Quirk maintains an extensive industry-specific information network driven by the Casey Quirk Knowledge Centers o
19、ngoing primary research.Data cited in this paper and its exhibits,unless otherwise indicated,comes from a number of Casey Quirks proprietary research initiatives,including our proprietary distribution benchmarking study and our Global CIO study conducted with T.ESG investingInvestments that incorpor
20、ate environmental,social,and/or governance criteria into investment analyses and decision-making processesDedicated sustainable investingInvestments promoting ESG characteristics as a primary objective of the investment processESG integrationInvestments that consider and integrate ESG factors within
21、 the investment process alongside other traditional criteria in investment decisionsImpactTargeted investments with the intention to generate positive,measurable social and environmental impact alongside a financial return*ThematicInvestments in ESG themes that address specific issues such as climat
22、e change,food,water,agriculture,etc.Includes products targeting SDGBest-in-class positive tiltInvestments that focus on positive ESG performance and incorporate broad sustainability issues as an investment process focus(i.e.,sustainable,ethical,responsible,environmental,social)Source:Casey Quirk.*Th
23、is paper considers only impact investment among asset managers,not development banks or other non-asset management entities*Not in scope for this paperIts not easy being green growth in dedicated sustainable investingTo date,European governments and regulators have been among the biggest advocates o
24、f dedicated sustainable investing.The Sustainable Finance Disclosure Regulation(SFDR),activated in March 2021,imposes ESG disclosure obligations on asset managers selling investment products within the European Union.SFDR and other EU regulations aim to promote wider adoption of sustainable investin
25、g among retail and institutional investors.A rapidly expanding number of stakeholders,however,also encourage sustainable investing,not only in Europe,but also worldwide.Exhibit 2.Stakeholders encouraging demand for dedicated sustainable investmentsSource:Casey Quirk.Pushed by these industry particip
26、ants,asset managers will more than quadruple their dedicated sustainable investing assets before 2025,with totals rising to$13 trillion worldwide,representing nearly 12%of global assets under management.More than half the growth will come from asset managers converting existing strategies(whether th
27、ey are ESG-aware or not)into dedicated sustainable portfolios,and customers globally will contribute over$3 trillion of new assets to such products.Key stakeholdersInvestors Increased scrutiny on values by customers,employees,and supply chains Performance expectations Increased ability to assess aut
28、hentic ESG integrationCommunity Increased scrutiny on values by customers,employees,and supply chains.PostCOVID-19 paradigm Growing vocal engagement with companiesManagers Greater ESG data availability and transparency More client-centric delivery More purpose-drivenRegulators Europe driving global
29、regulatory pace Regulation spanning stakeholders to create collective actionGovernments Greater acknowledgement of need for standardization of definitions and processes Focus on climate commitments PostCOVID-19 focus on social inequalitiesCompanies Awareness of ESG-related risk on competitive advant
30、age Lower cost of capital if ESG-aligned More purpose-drivenIts not easy being green funds,ETFs,and institutional mandates that claim to generate positive,measurable,impact;have a primary sustainability objective(for retail funds inclusive of a sub-set of article 8 and all article 9 assets);and/or u
31、se binding positive ESG criteria in the investment process.Managers maintain a formal philosophy and process primarily focused on sustainability,not just organically factoring in ESG considerations for risk management purposes.Sources:Morningstar,eVestment,Casey Quirk analysis.EMEA will still repres
32、ent a majority of dedicated sustainable investments in 2025,fueled by a number of trends:SFDR and local market regulation Growing investor demand Government-driven investment commitments Gatekeeper promotion of sustainable products Sustainable investment commitments of large asset ownersBut the Unit
33、ed States and Asia Pacific countries will represent a sizable portion of conversion and nearly half the worlds net new flows into dedicated sustainable portfolios,driven by:Increased disclosure and new local market regulation Shifting investor demand,particularly among individual investors Increased
34、 ESG and sustainability fluency among key professional buyers Government-driven green investment volumeGrowth will not be uniform across geographies or suppliers,particularly among existing product conversions.Additionally,growth estimates may fluctuate as managers may be forced to backtrack on SFDR
35、 commitments following green washing and regulatory push back.Asset managers will continue to diverge in how they react to sustainability questions across processes,products,people,and commitments,as well as the speed at which they act.These different reactions will shape the supply side and product
36、 range of dedicated sustainable investments.Some of this divergence will be reflective of different views on what sustainability factor is most important to each investor.The localized and channel-specific preferences will present a challenge to asset managers serving a global client base.Selecting
37、the best vision for dedicated sustainable investingAs regulators and buyers sift through the asset management industrys voluminous marketing material regarding sustainability,they are becoming more focused on separating vaporware from added value.Diligence,data,and research tools around sustainable
38、investing are intensifying,and tolerance for“greenwashing”is Exhibit 3.Dedicated Sustainable Investing AUM*,Regional,2020-2025e,$TStrategy ConversionsOrganic Growth$4T$0T$2T$14T$6T$8T$10T$12TAPAC$0.8TUS$0.3T$1.8TEMEAEMEA$1.0TUS$13.0T$0.4TAPAC$1.3TUS$2.5TEMEA$2.2TAPAC$1.0TEMEA$9.5T2020 AUMCapitalAppr
39、eciation$2.8T$4.5T2025e AUM$0.4TAPAC$0.2TIts not easy being green rapidly.Asset managers can take different approaches to sustainable investing,but they must show that they put client money specifically against whatever sustainable objectives they mouth to the marketplace.Creating a transparent and
40、credible sustainable investing vision to guide portfolio management decisions is neither simple nor standard.Building sustainable investment processes involves navigating six core challenges,and each asset manager has different skills and tools with which to tackle each one.There are three external
41、challenges:Fragmented client preferences,as heterogeneous buyers across various geographies express different preferences around sustainability Inconsistent ESG data,given limited assured ESG disclosures in many markets and the large,fragmented,and uncorrelated pool of vendors create a lack of stand
42、ardized information,which prevents investors and managers from efficiently evaluating and integrating ESG information into decision-making processes Increased greenwashing scrutiny,as regulators crack down on marketing claims and buyers plow more resources into diligence.As new data and standards co
43、me to market,managers must interpret the information,leverage it within their processes,and disclose according to these standardsThere are three internal challenges:Change management,as investment professionals revere culture,protect established investment frameworks,and consequently resist adaptati
44、on;organizations have been slow to hire and organize necessary talent Conflicting taxonomies and definitions,complicated by efforts to balance internal processes and external regulatory requirements Inadequate technology,amplified in cases where portfolio managers use specific applications or techno
45、logies solely for their own strategiesImplementing a competitive,dedicated sustainable investing process will force asset management leaders to face three truths:1.Only credible sustainable investing processes will succeed in the long term,as buyers penalize greenwashing.2.Managers need to determine
46、“what they stand for”amid a range of strongly held views,assessing the trade-off between the sustainability impact they seek and the required degree of change.3.Successful ESG insight generation will require robust resourcing,processes,and tools,potentially necessitating wider use of common decision
47、-support platforms across strategies.Developing a vision around dedicated sustainable investing,one that attracts buyers and guides executive decisions,is a critical first step.Leaders of asset managers must find a balance of flexibility and conviction that works best for their stakeholders:customer
48、s,talent,and owners.These visions fall into four roughly defined archetypes,each of which reflects an increasing degree of alignment around sustainability values and a commensurate level of strategic priority for the enterprise:1.ESG risk integrators:Asset managers with limited or no commitments to
49、dedicated sustainable investing or products,instead focusing on using ESG data to inform one of several risk factors assessed in building portfolios.2.Client-led ESG providers:Asset managers who maintain positions on sustainability,but present them as flexible options available for clients to direct
50、,depending on their own range of values.3.Goals-oriented outcome providers:Asset managers who clearly articulate commitments on sustainability issues,using them as core firm principles around which to make not only active investment choices,but also decisions around firm strategy.4.Sustainability“pu
51、rists”:Asset managers,primarily boutiques,who orient sustainability at the heart of all processes as their main competitive advantage,with strict and visible adherence to sustainability principles across the investment offering.Its not easy being green Quirk.As sustainability commitments become more
52、 central to an asset managers enterprise strategy and investment processes,the proportion of assets in dedicated sustainable investments rises,through both conversion and new product development.Additionally,the firm wields its proxy votes in tighter alignment with its sustainability goals.Exhibit 5
53、.Key metrics of dedicated sustainable investment providers by archetypeSources:Pensions&Investments,eVestment,Share Action,firm websites,Casey Quirk analysis.Archetype KPIs1Future-State ProgressionSustainable AUM%of total%of votes supporting ESGShare of 2020 AUM by firm archetypeShare of 2025 AUM By
54、 firm archetypeArchetype OutlookArchetype contextSustainability purist91%100%92%95%1%2%Continued proliferation of small players,particularly around impact investing Difficult to meaningfully scaleGoals-oriented ESG outcome provider17%37%71%79%8%39%Driven by increased manager-led ESG commitments Requ
55、ires translating commitments to clear firm KPIs and portfolio targetsClient-led ESG solutions player3%8%54%63%43%25%Many larger,global players migrating toward goals-oriented archetype Challenging to maintain divergent approaches to sustainability across product suiteESG risk integrator0%2%15%46%49%
56、34%Primarily firms outside of European marketsExhibit 4.Dedicated sustainable investing vision archetypesStrategic importance of sustainabilityPrimary differentiatorLimited values implementation ESG as“risk factor”1ESG risk integratorPrimarily focused on integrating ESG as a risk factor,with minimal
57、 or limited dedicated sustainable products2Client-led ESG providerFlexible,higher-level articulation of sustainability vision,built to accommodate client range of values3Goals-oriented outcome providerGuided by clearly articulated set of enterprise sustainability principles,goals,and commitments,whi
58、ch significantly influence firm strategy,product decisions,and investment processes4Sustainability“purist”Sustainability at the heart of all processes;strict and visible adherence to sustainability principles across entire offeringClient-led valuesFull-spectrum offering;“clients choice”Enterprise-gu
59、ided valuesESG as core firm principlesInvestor-led valuesESG impact as key value driverDegree of Values AlignmentIts not easy being green 5 outlines a key trend:By 2025,a plurality of dedicated sustainable investing assets will belong to firms that use their own enterprises sustainability commitment
60、s to guide investment decisions.This transition will reflect public declarations of sustainability commitments by large asset managers(such as net-zero emissions goals),which investment firms will then need to implement in their portfolios in order to maintain credibility.As asset managers make thes
61、e public promises,they should consider both the capabilities and operating model required to follow through.Key attributes of sustainable investing leadersSustainable investing leaders will effectively link strategy and their sustainability vision by aligning five key attributes,enabled by modifying
62、 three core elements of their existing operating models.Examining each attribute in turn:1.Clear sustainability vision.Building internal support for a clear,authentic sustainability vision requires settling some core decisions that will guide future enterprise strategy.Exhibit 6.Attribute 1:Clear su
63、stainability visionSource:Casey Quirk.Decision pointQuestion to answerKey points of alignment1Aspiration to differentiateHow core is sustainability to how we differentiate?Sustainability as core,part,or a minimal aspect of firm value proposition Potential avenues of differentiation(i.e.,product,proc
64、ess,positioning)Market or regulatory view of ability to differentiate over key time horizons2Alignment of valuesHow should our firm values inform our promise to PMs and clients?Core set of beliefs or principles Firmwide focus issues within ESG universe Discretion over sustainability decisions left u
65、p to PMs Degree to which the firm accommodates client-specific values3Appetite for transformationHow much are we willing to change to achieve our future-state vision?Degree of strategic or regulatory urgency Transformation risk Capacity to lead transformational changeKey inputs into decision-making
66、processSenior leadershipParent ambitions(if applicable)Functional leaders(i.e.,investments,sales)ClientsRegulatorsIllustrative strategic options spectrumAlignment across the three dimensions can help determine future state1 Aspiration to diffrentiate2 Alignment of values3 Appetite for transformation
67、Current stateFuture stateIts not easy being green product offering.Successful products must deliver upon their traditional objective of producing attractive,risk-adjusted returns without compromising the sustainability vision.Creating a credible offering requires a product development process that e
68、nsures new products stem from an investment platform that has the people,data,and systems to deliver upon their sustainability objectives.Sustainability adds new considerations to multiple aspects of the traditional product development process:Exhibit 7.Attribute 2:Sustainable product offeringSource
69、:Casey Quirk.As a function of both supply and demand,multithematic dedicated sustainable investing funds have attracted the most attention from retail investors worldwide,followed closely by funds focused on environmental objectives.Products oriented around social and governance goals are also growi
70、ng quickly.Firms that can credibly bring these types of products to market are well-positioned to capture growth early in the cycle as investors pivot portfolios toward sustainable exposures.Exhibit 8.Dedicated sustainable investment fund flow worldwide by sustainability objectives,20162020Notes:Def
71、ined as active funds positioned to deliver sustainable outcomes and/or impact by aligning with one or more specific sustainable investment themes,excluding broadly positioned ESG funds.Source:Morningstar,Casey Quirk analysis.3%8%41%48%Multithematic:Relatively weighting different targeted ESG themes
72、over time warrants a more active approachEnvironment:Sustainable energy and climate change themes drive an outsized flow share as focus shifts to Paris-aligned investmentsSocial:Increased public scrutiny of corporate behaviors pushes for new approaches to address social causesGovernance:Stewardship
73、is strongly emphasized among most managers,but hasnt seen strong product-focused thematic flows 1Internal taxonomy Establish whether internal investment groupings are broad versus strictly defined Define ESG integration Decide how closely to align internal taxonomy with external labels and regulatio
74、n2Product management Create a firm strategy to assess products for sustainable conversion Assess specific ESG features to consider integrating across the platform Evaluate firmwide exclusions3Product development Decide on sustainable investment themes to target in new fund launches Assess whether to
75、 launch sustainable“versions”of current flagship strategies Create a strategy to properly seed new sustainable product launches4Vehicle packaging Determine vehicle packaging for new strategy offerings Evaluate existing sustainable product packaging to ensure structure meets client demand5Pricing Est
76、ablish sustainable pricing strategy to assess offering at a premium or discount versus current product lineup Determine if pricing should be linked to specific ESG strategy targetsIts not easy being green integration of ESG factors into investment processes.Professional buyers do not want portfolio
77、managers that only talk about ESG.They are focusing on how(and how consistently)an investment organization sources and uses ESG data and how it translates into investment decision-making,including screening,selection,portfolio weighting,and exit strategy.Large investors with substantial sustainabili
78、ty commitments rank ESG articulation highest among all criteria with which they score potential providers.Exhibit 9.Importance of ESG factors in buying process,large asset owners worldwide with 50%ESG deployment,2021Source:Top1000Funds/Casey Quirk Large Asset Owner Survey.Articulation of ESG integra
79、tionSenior management commitmentCollaboration with managersReporting transparency and customizationReturns commensurate with non-ESG investmentsAssistance in assessing overall impactsESG-branded productsESG education94%65%59%35%28%24%18%16%Its not easy being green Quirk.4.Outcome-focused,active owne
80、rship,sometimes defined as“stewardship,”and often involving an asset managers voting approach.Casey Quirk research has found that asset managers are boosting shareholder engagement,with active voting at shareholder meetings jumping 33%between 2018 and 2020.Buyers expect asset managers with public su
81、stainability commitments to drive meaningful impact by actively voting.Sustainable investing leaders have clearly articulated,better-resourced shareholder engagement efforts.Diligence around ESG articulation involves buyers examining the decision-support platform underlying an asset managers entire
82、investment organization,rather than simply reviewing the investment professionals themselves.Sustainable investing leaders will stand out from competitors by differentiating themselves with three process components:Exhibit 10.Attribute 3:Credible integration of ESG factorsProcess component Best prac
83、ticesSustainability research Use of specialist third-party ESG data providers Enhanced alternative data aggregation capabilities(e.g.,natural language processing)to differentiate data inputs Increased sustainable resource specialization across thematic research Investments contributing to sustainabl
84、e research through bottom-up ESG risk analyses Strong partnership between investments and sustainable research professionals across thematic and company-specific researchAggregation engine Uniform data access layer ensuring data consistency and integrity Single proprietary aggregation engine incorpo
85、rating third-party and proprietary data,along with sector-specific risk frameworks,to generate ESG ratings,insights,and signals Specialized resources dedicated to maintaining the aggregation engine and generating ratings,research,and frameworksIntegration approach Robust process spanning the investm
86、ent platform,incorporating key data inputs,guidelines,and PM discretion expectations Clearly articulated integration philosophy that links firm sustainability beliefs and source of differentiated IP Centralized monitoring and oversight to ensure quality control Feedback loop between investment and s
87、ustainability research teams to conduct ESG attribution,enhance research notes,and perform deep dives into material ESG issuesIts not easy being green 11.Attribute 4:Outcome-focused,active ownershipSource:Casey Quirk.Legacy approachEmerging best practicesPhilosophy Passive,risk-aware approach focuse
88、d on mitigating issues More activist,engaged approach to drive outcomesThemes Focused on governance or select environmental or social issues Specific themes tied to key Sustainable Development Goals or sustainability issues(e.g.,biodiversity)Connected to strategic focus areas for the firm ESG strate
89、gy Informed by proprietary materiality framework and internal researchExpertise Lightly staffed stewardship team focused on coordination Expanding teams across disciplines Specialist expertise across sectors,regions,and themes Informed by proprietary sustainability researchApproach Loosely coordinat
90、ed approaches between:Stewardship teams leading shareholder voting efforts PMs leading return-and risk-driven engagement Fully integrated,coordinated approach tied to the investment process Clear active-ownership framework with timelines and action steps Leverage collaborative impactMeasurement Vagu
91、e,high-level objectives Specific,tailored KPIs tied to deep sustainability research Measurable progress benchmarks tied to key action stepsStewardshipreporting High-level activity reporting Transparent,outcome-based reporting back to end clientsIts not easy being green client engagement.Sustainable
92、investing leaders use relationship management(and client experiences)not only to explain their sustainability commitments,but also to report on their progress and impact.This manifests in multiple ways:a.Thought leadership:Unified,regularly produced content that outlines the firms sustainability val
93、ue proposition,goals,and impact b.Distribution alignment:Educating distribution professionals about the firms sustainability advantages,along with key sustainability themes,to drive client awareness about sustainability and respond to inbound client inquiries c.Access to ESG and sustainability exper
94、tise,with strong internal communication linking distribution professionals with the firms sustainability leaders and experts d.Client reporting functions,showing the impact of specific sustainability and ESG decisionsReporting is likely the most important of these four points,as it provides data sho
95、wing adherence to public promises.Effectively and consistently measuring and communicating the impact of these promises presents challenges due to lack of data and consistent client expectations on a framework for reporting.Many asset managers already struggle with client reporting,and any shift to
96、sustainable investing practices will further affect these systems.Exhibit 12.Best practices for client reporting in sustainable investingSource:Casey Quirk.Third-party data sets and partnershipsProprietary data and researchTools and technologyReporting interfaces Source multiple data sets to aggrega
97、te varied quantitative and qualitative data across E,S,and G Collaborate with NGOs and industry groups to enhance company-level ESG disclosures Aggregate proprietary data inputs across research,alternative data sourcing,and company surveys as inputs into ESG scoring Develop new tools and technology
98、to enhance data aggregation accuracy and granularity Build interactive reporting interfaces(e.g.,dashboards,portfolio analytics)to display ESG portfolio risks,scoring,and attributionIts not easy being green model changes for sustainable investment processesThe five key attributes outlined previously
99、 are capabilities that sustainable investing leaders add as competitive differentiators.To support them effectively,these asset managers often enhance existing elements of their operating models,particularly across three functions:1.Governance and organizational design.An initial step among firms pu
100、rsuing sustainability objectives has been the assignment of a dedicated leader for recruiting and establishment of sustainability.The sustainability leader within an asset manager has several different,critical roles,not only within the investment group,but also across corporate social responsibilit
101、y,executive decision-making,marketing,and talent recruitment.Increasingly,sustainability leaders are moving into the C-suite,supported by dedicated investment resources across the investment platform.Exhibit 13.Sustainable investing leader reporting lines,2020Source:Casey Quirk analysis.Leaders in s
102、ustainable investing evolve their governance and organizational structures to support their visions internally and externally.Efforts include:Empowering sustainability leadership and asking key sustainability executives to own the vision Providing external visibility,publicly promoting the firms sus
103、tainability experts and leaders and letting them drive thought leadership Holding the executive team accountable by embedding the sustainability agenda,including public commitments,into performance measurement goals Creating sustainability committees to encourage cross-functional alignment Naming“ES
104、G champions,”functional liaisons to sustainability committees Ensuring the appropriate resources are recruited and integrated into the investment team.2.Data and technology capabilities,essential for aligning the firm around a single source of truth for sustainable investing implementation.Innovativ
105、e ESG data and technology capabilities support long-term differentiation.Best practices include:Building a central data repository to integrate traditional investment data with ESG and sustainability data Assigning dedicated data and technology resources to oversee analytics engine enhancement,ESG d
106、ata hygiene,and innovation Improving sustainability reporting with better data visualization that depicts ESG risks,attribution,and performance Expanding proprietary ESG and sustainability research Bolstering sustainable investing tool development to align the firms sustainability vision consistentl
107、y across all portfolio managers,improving collaboration and decision-makingSustainable investing leader reporting line%of managers,2020Sustainable investing leader membership on ExCo%of managers,2020Reports into CEOYesNoReports into CIONot specified35%29%71%50%15%Its not easy being green 14.Operatin
108、g model changes for sustainable investing:Data and technologySource:Casey Quirk.3.Incentives.Sustainable investing leaders realize they must incentivize their executives(particularly their investment professionals)to adopt new behaviors that support the vision.This involves examining how the sustain
109、able investing strategy factors into five key pillars of talent alignment.Exhibit 15.Operating model changes for sustainable investing:Talent alignmentSource:Casey Quirk.Leadership buy-inCreating executive-level accountability to successfully meet firmwide goals and establish a broader sustainabilit
110、y-conscious firm cultureAsset management technology ecosystemAll sustainability-dedicated tools,applications,data,and research should feed into one single technology ecosystem to unite all data and technology centrallyIntegrated applications and toolsSustainability applications and toolsReal-time ex
111、change of informationSustainability toolkitIncentivesVariable remuneration tied directly to achieving firmwide sustainability goalsTraining and developmentTo enhance sustainability expertise by reinforcing expectations across all functional areas of the firmSocial contract with PMsTo align the inves
112、tment platforms objectives toward investing for common sustainable goalsTransparent KPIsTied to operational execution to reinforce the sustainable strategy and orient firm adoptionFive pillars to align talentCollaboration toolsPromotes connectivity between sustainability and investment teamsESG comp
113、any data aggregationThematic ESG researchCarbon emissions dataESG ratings and signalsESG benchmark exposuresPeer analysesDecision-making toolsHelps investment teams analyze ESG data in decision-making teamsReporting toolsTracks and discloses portfolio-level sustainability performance metricsIntegrat
114、ed data repositoryCentralized access to robust data sources forming a singular platform view,incorporating third-party and proprietary data setsIts not easy being green are probably the thorniest of these three pillars to tackle.Sustainable investing leaders thoughtfully examine remuneration practic
115、es to ensure that rewards link to sustainability commitments by:Embedding sustainable considerations within performance measurement processes for both investment professionals and other key leaders.Requiring firm leaders to transparently account for sustainability in appraisals and compensation deci
116、sions Linking sustainability objectives to variable compensation at the board and executive levels,and publicly disclosing these decisionsTo find out more,read Incorporating ESG measures into executive compensation plans.ConclusionAs asset managers weigh their aspirations regarding sustainability,as
117、 well as the investments and changes required across firm attributes and operating model elements,different firms will take different first steps.ESG integrators,for example,require fewer changes,but in order to capture their share of the$3 trillion in new flows,they must convincingly integrate ESG
118、factors and data into their investment processes.Sustainability purists,conversely,will worry less about product developmentall their offers will be sustainable by definitionbut everything else becomes critical.Defining a vision helps asset managers structure their change management priorities and p
119、lans.Exhibit 16.Dedicated sustainable investing archetypes:Priorities and challengesSource:Casey Quirk.This prioritization helps define the key trade-offs each archetype contains:1.ESG integrators require less change,but are vulnerable if buyer sustainability expectations continue to rise.2.Client-l
120、ed ESG solutions players can serve clients across a wide range of sustainability beliefs,at the cost of high complexity and potentially subscale offers.3.Goals-oriented outcome providers align well with medium-term sustainable investment demands,but will also face hard conversations with talent and
121、leadership about career objectives and remuneration.4.Sustainability purists represent the bleeding edge of sustainable investing,but only appeal to a narrower buyer group,slowing efforts to achieve scale.Not all asset managers will develop sizable dedicated sustainable investing businesses,and many
122、 may not need to do so.But all asset managers will require thoughtful answers to questions about their approach to sustainabilityas well as the capabilities and operating models needed to support their chosen path.ESG risk integratorClient-led ESG solutions playerGoals-oriented outcome providerSusta
123、inability puristClear sustainable investing visionSustainable product offeringAuthentic ESG process integrationOutcome-oriented stewardshipInsight-led client engagementClear governance and org.designInnovative ESG data and technologyTalent and incentives aligned to goalsPotential challengesPotential
124、 strengthsAs used in this document,“Deloitte”means Deloitte Consulting LLP,a subsidiary of Deloitte LLP.Please see for a detailed description of our legal structure.Certain services may not be available to attest clients under the rules and regulations of public accounting.This communication contain
125、s general information only,and none of Deloitte Touche Tohmatsu Limited,its member firms,or their related entities(collectively,the“Deloitte Network”)is,by means of this communication,rendering professional advice or services.Before making any decisions or taking any action that may affect your finances or your business,you should consult a qualified professional adviser.No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.Copyright 2021 Deloitte Development LLC.All rights reserved.