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
Senior Manager, ESG SME
Anna is a Senior Manager at Alpha with over six years’ experience consulting for Financial Services firms. She has helped clients deliver large scale transformations, including technology and operating model change, and is active in Alpha's ESG & Responsible Investment, Digital & Agile and People & Culture propositions. Prior to joining Alpha, Anna worked as a Big 4 consultant and as a founding member of a technology start up.
Katie Simm
Senior Manager, ESG SME
Katie is a Senior Manager with a focus on technology implementation, ESG & Responsible Investing and programme delivery services. Since joining Alpha in 2018, Katie has led a number of implementation programmes with large asset managers, including helping to define investment operating models and the consolidation of investment platforms. Before joining Alpha, Katie worked as as a Big 4 consultant specialising in Asset Management & Insurance.
Vanessa Bingle
Senior Manager, ESG SME
Vanessa heads Alpha's ESG & Responsible Investing proposition. Since joining Alpha in 2018, Vanessa has led a variety of investment-focused projects with asset managers and asset owners, including helping to design and embed an organisation's ESG vision across investment- and client-facing activities, post-merger integration of investment teams, and designing investment research collaboration approaches. Before joining Alpha Vanessa worked for six years as an Investment Consultant.