The asset owner will develop the requests for proposal (RFP) document, aligned with the original mandate text. Clear descriptions of the required capabilities will help collect information to enable the asset owner to review and compare the suitability of managers.

What is the role of investment consultants?

The investment consultant often supports the asset owner in drafting the RFP. The consultant should ensure that there are clear ESG provisions in the document designed to collect information about the managers’ ESG beliefs and capabilities. The RFP should seek concrete examples of ESG integration and engagement, as these enable the investment consultant to gain deeper insights into managers’ capabilities than provided by marketing material, and more effectively compare prospective managers. 

Questions to ask the investment consultant

  • How does the investment consultant incorporate asset managers’ approaches to ESG issues into the design of an RFP (or equivalent)? Can this be adapted to incorporate the asset owner’s preferences?
  • Can the investment consultant provide examples where clients adopted ESG considerations into RFPs due to the consultant’s advice? What were the (dis) advantages or drivers for such adoption?
  • If a specific client ignored the investment consultant’s advice in relation to ESG incorporation, what was the key reason for this decision? 

Topics

Investment consultants and ESG: an asset owner guide