Describe why you do not currently incorporate ESG into your asset allocation services, and possible plans for doing so in the future
We don’t currently incorporate ESG in the quantitative modelling surrounding our asset allocation services as we do not yet consider it feasible to do so in a robust manner. However, we can provide scenario analysis and plan to launch four new climate scenarios later this year. We do take ESG issues into consideration when advising on investment strategy implementation. For example, if a client wanted to reduce their exposure to climate risks, we would advise on the options available within their selected asset classes once the high-level allocation between the asset classes has been agreed. Another example would be consideration of whether to invest actively versus passively in emerging markets where the governance standards can be relatively weak and so an active approach might be preferred. We also take account of ESG issues in our investment manager selection advice.