For many years Frontier has worked with government and insurance investors, collectively referred to as liability-driven investors (LDI). Over this time we have developed a deep knowledge of their unique investment objectives and the constraints they operate within.
Recently, there has been a growing focus on how LDI investors manage climate change risk and set decarbonisation strategies. In response, Frontier has sought to better understand these challenges and opportunities to provide meaningful support to our LDI clients. As a part of this effort, our LDI and responsible investment teams recently visited Sydney to meet one on-one with insurers and host a roundtable to discuss these important topics.
While our discussions mainly focussed on insurers, the insights gained strengthens our ability to support the broader LDI investor base in refining climate risk management and decarbonisation strategies. The roundtable also highlighted the benefits of gathering like-minded peers to share their specific experiences when dealing with complex issues like climate change. We hope the insights shared will prove equally valuable as participants apply them in their own workplaces.
In this paper we cover:
- Common goals and other areas of differences among LDI investors
- Mandatory climate reporting
- Approaches to climate change risk management versus net zero objectives
- Broader strategic considerations within the LDI space
- Impact investing
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Investors in the LDI space are at various stages in their responsible investment and climate change risk management maturity, both among themselves and relative to other institutional investors. The rapidly growing ambition of this segment was clear, while the limitations around resources and data, competing strategic priorities, and for some, the lack of implementation options, are challenges we look forward to helping these investors solve.
If you want to discuss this paper in more detail, please reach out to your consultant or a member of our Responsible Investment Team.
Frontier Advisors is committed to promoting a supportive community for our clients and the wider asset owner universe. We invite you to join us in future roundtable discussions to share your experiences, learn from your peers, and collaborate in improving investment outcomes for your organisation. If you have an idea for a topic you’d like to discuss with other like-minded investors in a roundtable environment, please contact your consultant at Frontier Advisors.
