A fourth win a row for Mercer as Investment consultant of the year as it focused on integrating its sustainable investment capabilities across its entire investment platform, covering research, advice and solutions across 24 countries in 2023.
Currently, the team consists of 23 sustainable investment specialists, supported by 57 environmental, social and governance (ESG) integration leads and champions. The aim is to assist institutional investors to integrate environmental, social & corporate governance (ESG) factors and address systemic issues, such as climate change and nature, as well as active ownership (stewardship) into investment decisions, given the impact on risk, returns and reputation.
Mercer's global manager research team evaluates over 4,500 investment strategies, across a broad range of asset classes, on the extent to which they integrate ESG issues, and active ownership.
Other highlights in 2023 include further developing its Analytics for Climate Transition (ACT) tool, which supports asset owner climate-related disclosures and reporting, as well as supporting asset owners to set climate transition strategies and targets, including net zero pathways. In 2023 it was used by over 30 asset owners.
It also extended the use of its Responsible Investment Total Evaluation (RITE) tool, which evaluates clients' sustainable investment approaches in terms of process, policy, beliefs and portfolio and compares how they are progressing relative to their peers. In 2023 more than 1,000 Mercer clients, with over $400 billion in assets, used RITE.
"We are thrilled to win this award for a fourth year and again be recognised for our leadership in sustainable investment," said Annabell Siem Mathiesen, global head of Sustainable Investment at Mercer. "We continue to expand and further integrate our sustainable investment expertise and capabilities across our wider investments platform to help meet our clients' needs across the globe.
Mercer also won the Thought leadership paper on sustainable investing, Global award for its 'Transition Today' research.
Presented at last year's COP 28 the paper highlights a transition framework that considers mitigation, physical risks and adaptation, natural capital, circular economy and fair carbon budget. The aim of the research is to help broaden investment approaches, to the energy transition, beyond portfolio carbon-reduction objectives, which Mercer believe many investors are focused on.
Some of the report's key findings include:
- 55% of transition financing needed will come from the private sector, but institutional investors are currently only allocating 0.01% of asset base
- $4.8 trillion cumulative transition finance was committed between 2011-2020, yet $4.3 trillion is required annually to 2030
- The current annual adaptation finance gap is estimated to be $194-366 billion.
Mercer argues investment decision-making, both today and longer term, includes addressing whether running portfolios aligned with the transition to a net-zero economy can help manage investment risk and opportunity while supporting financing gaps to mitigate the effects of global warming.
In addition an evolved definition of transition seeks to broaden investment approaches beyond carbon-reduction objectives, considering and incorporating solutions for both mitigation and adaptation to the physical risks of climate change.
'Partnering for Transition: Working to advance investor frameworks to mobilize capital flows in Africa' undertaken with the Green Investment Principles Africa Chapter is another research paper Mercer launched last year at COP 28. It highlights how mobilising capital to support the low-carbon transition in Africa can be key to achieving global climate goals. It also shows that climate investing across the continent can present investment opportunities.
