Where to start your ESG-journey and how to select the best consultants

The Asset Owner Guide to Selecting Investment Consultants is a report published by the Principles for Responsible Investment (PRI), an international organization that promotes responsible investment practices. One of its goals: It guides asset owners in selecting investment consultants with expertise in environmental, social, and governance (ESG) considerations.

The importance of expertise

First of all, it's essential to select investment consultants with this expertise, says the report. It explains how ESG factors can materially affect the long-term performance of your investments and that asset owners have a fiduciary duty to consider these factors when making investment decisions. There's a growing demand for ESG expertise among asset owners and the investment industry as a whole. To help you out, it provides a six-step process for selecting such an expert.

Step 1: a consultant is only as good as his data

It's important to take stock of your portfolio's performance before onboarding a consultant or diving into costly ESG investments. Collect, enrich, and analyze all available data on your assets so that Healthy Workers can provide you with an exact report on how your building is performing and how it can improve. Therefore, first create the right conditions and an optimized base layer of sustainability performance of your portfolio’s for the consultant to work with.

Step 2: define the scope of their role

Now the data and insights are in place we can define the scope of their role. That includes the specific ESG issues they will expect to address. Identify the ESG risks and opportunities most relevant to the asset owner's investment objectives, based on Healthy Workers’ data and insights.

Step 3: identify potential consultants

Use various sources to identify potential consultants, including industry networks, referrals from other asset owners, and consultant databases.

Step 4: screen the candidates

Conduct a preliminary screening of potential candidates. Review their qualifications, experience, track record in ESG investing and alignment with the asset owner's values and investment objectives, based on Healthy Workers’ data and insights.

Step 5: request for proposal

Issue a request for proposal (RFP) to a shortlist of potential consultants. The RFP should provide detailed information about the asset owner's investment objectives based on the Healthy Workers’ data and insights, ESG priorities, and expectations for the consultant's role.

Step 6: evaluate the proposals

That involves assessing their quality, including the alignment with the asset owner's investment objectives and ESG priorities, as well as the consultants' qualifications, experience, and approach to ESG investing.

Step 7: make a selection

Finally, select the consultants that best meet the asset owner's needs. That means: weighing the strengths and weaknesses of each proposal, as well as the asset owner's assessment of the consultant's skills and experience.

What’s next?

Create your ESG strategy, plan, and begin to improve your assets based on analysis and insights provided by the Healthy Workers platform. Track the performance improvements resulting from your sustainability investments and establish accountability for your suppliers.

The report also includes recommended questions that asset owners can ask potential investment consultants to assess their ESG expertise. These questions cover various topics, including the consultant's understanding of risks and opportunities, their approach to integrating the factors into investment decision-making, and their experience engaging with companies on ESG issues .