Investment and stewardship
Sustainable investment is about helping improve investment outcomes – seeking better returns and lower risk.
It is about finance-driven, long-term strategies that integrate ESG factors and effective stewardship. We believe this reflects good risk management, supports a robust investment industry and is central to successful long-term investment strategies.
At WTW, we have long believed in the importance of sustainable investment. We also believe that integrating sustainable investment into the entire investment process from setting the mission and objectives through asset allocation, portfolio construction and manager selection, to monitoring and reporting, is the best way to realize its full value. Therefore, it is fully integrated and embedded in our research, client advice and solutions.
Our Fiduciary Management and pooled solutions give clients access to our best sustainable investment ideas and implementation, and are naturally where the full effect of our sustainable investment research can be felt.
To support these principles, the WTW Investments portfolio is targeting net zero greenhouse gas emissions by 2050 at the latest, with at least a 50% reduction by 2030,* in its fully discretionary delegated investment portfolios. Craig Baker, WTW’s Global Chief Investment Officer, says, “Climate change, and a just transition to net zero greenhouse gas emissions, is a systemic and urgent global challenge. We believe that working to achieve net zero by 2050 in our discretionary portfolios is completely consistent with the financial goals we have been given by our clients as climate change has the potential to impact returns across multiple asset classes. We have already embedded this in our investment process and ultimately in the portfolios we are managing and stewarding.”
Below are some of the many external initiatives and partnerships WTW is engaged in to achieve long-term sustainable investment:
- Association of Member Nominated Trustees (AMNT)
We have partnered with the UK Association of Member Nominated Trustees (AMNT) and the UK Sustainable Investment and Finance Association (UKSIF) in their efforts to stimulate investment consultant support for trustees after the Pensions Regulator issued guidance on the consideration of long-term sustainability and ESG factors by the trustees of defined benefit and defined contribution schemes.
- Chartered Financial Analyst (CFA) Institute
Our global head of investment content, Roger Urwin, continues to engage with the CFA Institute to raise the profile of sustainability as a topic in the curriculum and as strategic director of the CFA Future of Finance initiative, which works to shape a trustworthy, forward-thinking investment profession that better serves society.
- Hermes Equity Ownership Services (Hermes EOS)
We partner with Hermes EOS to undertake public policy engagement on our and our clients' behalves. Particular topics we have encouraged are stranded assets, corporate ESG disclosure and board governance. More recently, we appointed Hermes EOS to conduct corporate engagement and provide voting advice on holdings in our flagship equity pooled solution, which targets equity out-performance through high conviction, concentrated, long-term mandates.
- International Integrated Reporting Council (IIRC)
To promote communication about value creation as the next step in the evolution of corporate reporting, we are currently on the integrated thinking task force for the IIRC.
- MasterTrust LifeSight and MSCI
We have collaborated with MSCI in the development of a new core equity strategy that integrates ESG scoring and ESG momentum within a low-cost solution suitable for both defined benefit (DB) and defined contribution (DC) schemes. The strategy's seed investors included the MasterTrust LifeSight.
- Principles for Responsible Investment (PRI)
We are a signatory of the PRI, the world's largest proponent of responsible investment, and an active member of the working group for ESG/Sustainable Development Goals (SDGs) in Strategic Asset Allocations. This work aims to identify the ways in which ESG, the SDGs and sustainability in general can be incorporated in the strategic asset allocation decision making process. We have also partnered with PRI to produce a report on megatrends (long-term, transformative changes that will affect and influence the economy, society and the environment) including social, technological, economic, environmental and political issues.
- Secure income and multi-asset pooled solutions
As part of secure income and multi-asset solutions, we have invested in a range of high quality opportunities that are compelling investments in their own rights, are supported by long-term sustainability trends, and also benefit from having attractive societal and environmental impacts.
- Advanced greenhouse for sustainable agriculture
- UK's largest energy-from-waste project – incinerating non-recyclable waste to generate electricity
- Specialist temporary accommodation for vulnerable families and housing for disabled adults
- Renewable energy such as Japanese solar, Scottish hydropower
- Venture capital to harness world-leading scientific research
- Insurance linked securities supporting climate resilience
- Private equity investment in areas such as healthcare education and cyber security
- Transition Pathway Initiative (TPI)
We are official supporters of the TPI, a global investor initiative led by asset owners that assesses companies' preparedness for transition to a low-carbon economy. Led by academic research from the Grantham Research Institute and London School of Economics, TPI is supported by more than 40 investors globally with combined assets over $13 trillion.
- UK Stewardship Code
We are a signatory to the UK Stewardship Code, recognizes and promotes the value and importance of effective investor stewardship in our own activities, as well as in those of our clients and partners.