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Investment consultants team up to promote sustainability in US market

The group has launched workstreams on reporting, stewardship and regulation

Mercer, Wilshire, Aon Hewitt, Cambridge Associates and Willis Towers Watson are among 14 investment consultants behind a new group seeking to “promote and improve sustainable investment practices” in the US. 

The Investment Consultants Sustainability Working Group (ICSWG), which also includes Meketa Investment Group, SEI, ACG, Callan, Marquette Associates, NEPC, RVK, Segal Marco Advisors and Versus Investments, will initially focus on three topics: reporting, stewardship and regulation. 

It comes as expectations mount for a stronger regulatory focus on ESG in the US. To date, both the Securities and Exchange Commission and the Federal Reserve have announced efforts to address climate risks, sustainability disclosures and “ESG-related misconduct”, while internationally the US has been tapped to lead two global initiatives related to sustainable finance.

The new group launches less than a year after a UK-focused equivalent, which has subgroups dedicated to asset owners, asset managers and ‘innovation’ as well as reporting, stewardship and regulation. 

Members of both groups must commit to six objectives that seek to encourage “good practice with practical advice” and engagement with industry and regulators on sustainability topics – particularly on behalf of “clients who lack the resources to engage directly”.

Aon Hewitt, Cambridge Associates, Mercer, SEI and Willis Towers Watson are founding members of both groups. 

Meketa said the project was “inspired by our peers in the UK to better support our clients in addressing the critical sustainability investment issues of our times”.

In January, ICSWG-UK released guidance aimed at helping trustees assess the climate competency of investment consultants. In April, it publicly endorsed guidelines from the Impact Investing Institute on measuring investment impact.