Wet weather plagued the penultimate month of the year but failed to dampen people’s appetite for socialising. The start of November marked the just over one-year anniversary of my networking events – sorry, pensions salons! And, despite it being a rainy evening, I had the best turnout to date with 37 people showing up to discuss whether sustainable investors should allocate to fossil fuels. I’ve also worked a couple of news shifts for Pensions Expert and, ahead of the autumn statement, wrote a story looking at the impact of freezing the lifetime allowance. In mid-November, I was at the Tate Modern for the State Street Institutional Press Awards and won the journalist of the year for passive investment as well as being shortlisted for the ESG and pension categories. Dead chuffed! Towards the end of the month, my latest article for Professional Pensions was published which asks what next for liability-driven investment?
Networking event: should sustainable investors allocate to fossil fuels?
On a rainy evening, Mark Fawcett, CIO of Nest and Dr Rory Sullivan, CEO of Chronos Sustainability participated in a lively debate on investing in oil and gas majors. Exclusion of the sector was quickly ruled out but both acknowledged the importance for institutional investors to monitor companies effectively to make net zero a reality. That will take a lot of skill and resource – and require ‘muscular activism’ from shareholders. There was a fascinating debate about how oil and gas companies could evolve – whether they would change their business model, focus on existing strengths or become serial acquirors of innovative small green energy firms. The first event for 2023 will be at the end of January, so if you are interested in attending, get in touch!
BMA warns of spike in early retirements over tax relief reforms
This is a cautionary tale of the second order impact of changes to regulation. Freezing the lifetime allowance to 2026 at just over £1m has already caused an exodus of senior staff from the NHS as they take early retirement. This article, written before the autumn statement, warns of the impact of continuing this freeze past this date. While there were no further announcements at the autumn statement, this exodus of staff can be expected to continue for at least the next four years. In addition, high inflation combined with a LTA freeze creates a perverse incentive for staff to retire even more quickly because of the mismatch of inflation linkage between wages and pension income.
State Street Press Awards 2022
It was delightful to be back in person for the State Street Institutional Press Awards. After a wet and dank morning, the weather cleared up to reveal the stunning views from the sixth floor of the Tate Modern. To make the day even better I was shortlisted not only for the pensions category but also for ESG and then won the journalist of the year for passive investment! It’s been good year for awards – I was also shortlisted for the 2022 Headline Money Investment Journalist of the Year (B2B) as well as becoming the highly commended, DC Journalist of the Year at the WTW Media Awards 2022. If you would like an award-winning journalist to help you to write your next awards submission, get in touch!
What next for liability-driven investment?
My latest feature for Professional Pensions explains the path forward will vary according to each scheme’s circumstances. Well-funded schemes hedged to 100% on technical provisions are likely to have emerged from the crisis in a strong position – as did those with low levels of hedging. But schemes which had high hedging but a funding gap, may now have to no option but to live with lower levels of interest-rate insurance so they can address their funding gap. Some well-funded schemes might also opt for lower levels of hedging in the future. There are also schemes which have unbalanced portfolios – some with too high a proportion of illiquid assets and others with too many growth assets.
Avoid being labelled a greenwasher
Credibility is vital to building trust with potential and current clients. That’s true for any asset manager but especially important for those who want to be perceived as a best-in-class sustainable investment manager. To avoid being labelled a greenwasher you need a clear purpose and a way to communicate that vision. I created this quiz to identify your current sustainable investment strengths and weaknesses. It helps you to improve so you can stay ahead of your competitors. Curious? Then take the test! It’s only 15 questions and takes only three minutes.
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