We also recognise our responsibility as an industry leader to help our trustees and clients prepare for the challenges and opportunities that the future will present and were delighted in 2020 to support the delivery of Ireland’s first Responsible Investment Trustee (RIT) qualification.

There has been a growing focus in investment markets on sustainability – that is, incorporating sustainability considerations into investment decision-making. Issues such as climate change and how companies are run are becoming increasingly important, not just for society as a whole, but also to investors. It is increasingly evident that from an investment perspective, these issues are creating new risks and will have a financial impact in the future.

The changing regulatory landscape is accelerating a structural shift in global capital, largely driven by the higher prominence of climate change on political agendas and a stronger alignment from global leaders of the need for urgency of action on this key agenda. This will only accelerate the transition of capital to sustainable investments.

A lack of knowledge remains one of the biggest barriers for investors. While interest in this space has increased, sustainable investing may well fall short of becoming a mainstream investment solution anytime soon. Investors’ lack of understanding of what sustainable investments are and their benefits is often reflected in their high apprehension to invest. Part of this is attributed to the jargon around sustainable investing.

The financial sector needs to bridge this knowledge gap to enable investors to facilitate positive, sustainable economic growth while generating returns. As an industry, we can do more to address the proliferation of acronyms and rally for standardisation, while continuing to educate on the drivers behind sustainable investing.

At Irish Life Investment Managers (ILIM) we believe in building a more sustainable future for everyone and that we have a responsibility to create long term sustainable returns for our clients. We believe that consideration of environmental, social and governance (“ESG”) factors is an integral part of the risk-management process and that systematically considering these issues will lead to more informed investment decisions.

We also recognise our responsibility as an industry leader to help our trustees and clients prepare for the challenges and opportunities that the future will present and were delighted in 2020 to support the delivery of Ireland’s first Responsible Investment Trustee (RIT) qualification.

Developed by the Responsible Investment Institute, the RIT course was designed specifically for trustees getting to grips with the practical application of responsible investment. It is accredited by the Institute of Banking and the LIA. We were supported in this education initiative by Sustainable Finance Skillnet which is funded by the Department of Further and Higher Education, Research, Innovation and Science.

The course is broken up into a number of modules, with key learning outcomes. This includes a focus on why sustainability is important, what responsible investing is, how the ESG framework can help deliver sustainability and most importantly who are the key stakeholders in the fiduciary chain and the roles they can play in incorporating responsible investment into our clients pension schemes’ investment considerations. The Responsible Investment Trustee course was designed to help trustees to move ahead of changing regulation with respect to investments and knowledge requirements, to better place them to meet the demands of a new generation of members, and develop their expertise in responsible investment. The objectives of each trustee board may be different, but we are certain that all pension schemes can benefit by having a trustee board with a fundamental understanding of this subject.

The feedback on the course was overwhelmingly positive in terms of helping trustees understand responsible investment and its practical application. Plans for a broader roll-out across our client base and members is well underway this year. Education is an integral part of our approach to responsible investment and helping our clients in general.

Our clients trust us with their investments and to deliver on our core promise to them, to deliver better futures. That is our priority and we believe we can do this and at the same time factor in the responsible impact of our investment decisions.

In doing this we also have an obligation to ensure our clients understand the different aspects of sustainable investing through education and tailored solutions to meet both their investment and impact needs. Having deep insights into the motivations of clients and developing the tools to facilitate informed conversations will therefore be critical to achieving a more sustainable eco and financial system for everyone.

End

Carol Leonard

Senior Portfolio Manager, Irish Life Investment Managers