Client expectations and regulation have changed at a pace and to a depth that couldn’t have been anticipated. What was market leading two years ago is market baseline today. Many organisations who already had plans to evolve their ESG & Responsible Investment capabilities are realising they need to accelerate and aim higher in what they are trying to achieve.
Those who will remain relevant are investing substantial sums in transforming their whole organisation, and it is crucial that those investments target the right outcomes and achieve them efficiently across Corporate Strategy, Clients, Investments, Regulation, and their Foundations.
Our ESG transformation framework
Our proprietary ESG & Responsible Investment transformation framework takes a whole-of-organisation approach, informed by our extensive experience in delivering strategic, large-scale change with investment managers.
To achieve success, every team in your organisation must pull in the same direction under a common vision.
If you don’t know where you’re going, every road will lead to nowhere
You need to understand where you are today, and define how you want to differentiate yourself from your peers, with input and buy-in across your core functions from the outset. We have created a market benchmarking framework that assesses organisations from ‘limited’ to ‘aspirational’ across our 5 dimensions, including:
Regulation
What is on the agenda of regulators and policy makers in your jurisdictions? What regulations are your clients subject to? What voluntary codes and industry standards are you signed up to, or should you be? What are the practical implications for your business?
Clients
What are your clients asking for now? What do you think they will want in the future? What products and propositions are you offering? How are your relationship managers engaging with your clients?
Investments
How does sustainability feature in your investment philosophy across desks? How are the investment teams working today? How is ESG embedded in research, portfolio management and active ownership? How is ESG influencing decision making?
A marathon, not a sprint
Achieving an organisation’s ambitions in ESG & Responsible Investment will be a journey. While there will be some “quick wins”, for most organisations this will be a multi-year journey impacting the entire organisation. This requires a coherent roadmap and strong governance and change expertise to deliver:
- Design the target state ESG & Responsible Investment operating model, with clear accountabilities and responsibilities
- Define your brand & market strategy across your entire investment range
- Agree desirable levels of alignment across investment desks
- Create a realistic implementation roadmap
- Mobilise nimble governance to successfully guide the transformation
Building flexible foundations
Regardless of the size of your ambition, the pace at which the market is evolving means that investment in flexibility is required, in addition to achieving the defined target state. To future-proof your investment embedding ESG & Responsible Investment in your organisation’s foundations is crucial:
- Define the data strategy and technology architecture to support ESG integration at scale
- Build your data analytics & reporting platform to deliver insights efficiently and at scale to thousands of clients
- Harmonise minimum standards of compliance across jurisdictions
- Grow capability in your people across the relevant functions in your organisation
- Monitor outcomes achieved against evolving market standards
Where do we begin?
Understanding how you rank against your peers and defining the key principles to underpin your vision is key to setting the right priorities and executing against them. If you want to understand how your organisation compares to the market, you can contact us for an initial conversation.
About the Authors
Anna Skylakaki, CFA
Director, ESG SME
Anna is a Director in Alpha’s Asset & Wealth Management Consulting team, specialising in large scale transformation and a strong track record in high quality delivery.
Anna has experience across the asset management value chain, from Investments to Operations, Regulation and Client & Digital, and has most recently supported a number of our clients with embedding ESG & Responsible Investment across their operating model.
Anna has over 10 years’ experience in financial services consulting. She holds a BSc in Economics, Politics and International Studies from the University of Warwick and is a CFA Charterholder.
Katie Simm
Director, ESG SME
Katie joined Alpha in 2018 and is a Director in Alpha’s Investments practice.
She has a decade of experience in large-scale transformation, with a focus on Investment Technology & Data across strategic planning, operating model design and complex implementation. She is an SME in project & programme management, supporting clients across programme and portfolio landscapes to deliver effective change.
Before joining Alpha, Katie attended the University of Warwick and worked in Deloitte UK’s Programme Leadership practice with a focus on Financial Services.
Vanessa Bingle
Director, ESG SME
Vanessa is a Director in Alpha’s ESG and Responsible Investment practice and led the development and launch of this capability at Alpha.
Vanessa has shaped and led multiple engagements with asset managers and asset owners to define and deliver their ESG & Responsible Investment ambition. This includes setting vision and strategy, embedding throughout investment and client-facing functions, and building the data, technology and operating processes to support the enhanced capabilities.
Prior to joining Alpha Vanessa worked as an Investment Consultant with Willis Towers Watson in London and New York. Vanessa is a Fellow of the Institute and Faculty of Actuaries.