Twelve investment firms have announced the launch of the Investment Consultants Sustainability Working Group, aimed at improving sustainable practices across the investment industry.

The working group argued that whilst the investment industry has made progress within sustainability, more “urgent and constructive action” needs to be taken to address the "systemic challenges" facing the industry, particularly around climate change.

The member firms stated that as a “critical link” between asset managers and asset owners, they are “optimally placed” to promote a focus on sustainability which could ultimately help to drive greater change within the industry.

The group has outlined six commitments for all member firms, which includes engaging across a broad range of stakeholders, seeking investment outcomes that are genuinely sustainable, and creating a guiding set of principles that indicate good practice with practical advice.

They are also expected to align with and support existing industry bodies and initiatives, as well as being a body where regulators and stakeholders can seek input, and to support clients who are too small to meaningfully engage with industry initiatives.

The group argued that where work is already underway by industry bodies, output from the working group members could be “even more impactful”.

The group has also highlighted six initial individual work streams that it plans to explore: reporting; asset owners; asset managers; stewardship; regulation; and innovation, new products and impact investing.

The member firms are: Aon, Barnett Waddingham, Cambridge Associates, Cardano, Hymans Robertson, Isio, Lane Clark and Peacock (LCP), Mercer, MJ Hudson Allenbridge, Redington, SEI, and Willis Towers Watson.

Whilst all members of the working group provide investment consultancy services to UK asset owners, member firms will take “appropriate measures” to avoid any conflicts of interest and ensure that the group’s activities are conducted in accordance with the appropriate laws.

Commenting on the launch, Hymans Robertson head of responsible investment and partner, Simon Jones, argued that climate risk is “the issue of our time”, emphasising that the financial services industry has a “huge part to play” in addressing this.

Mercer global head of investment research, Deb Clarke, echoed this, emphasising that using the “collective voice of the consulting industry” to ensure greater transparency consistency and support is an “important step forward”.

Willis Towers Watson head of global research, Luba Nikulina, added: “It is critical that we use our collective voice now to not only influence how the investment industry approaches sustainability; but importantly to provide greater clarity on what is needed and more support on what actions can be taken to make a tangible difference.”

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