Seeking an optimal sustainable investment strategy

We specialise in creating leading sustainable investment strategies to help ensure your portfolio can navigate tomorrow’s challenges. Drawing on two decades of experience, our global team delivers research, advice, tools and solutions to help you manage your risk profile while seeking favourable returns along your journey.

We’re at a critical point for sustainable investment: Governments are establishing sustainable roadmaps and regulations; investors are adopting Sustainable Development Goals; and donors and beneficiaries are demanding that investors take real action to stop pollution, grow the economy sustainably and protect the vulnerable.

As they incorporate these ESG considerations into their portfolios, investors are turning their attention to how DEI issues are being acted on by managers and incorporated into strategies. They are exploring the intersection of positive environmental and social outcomes and delivering on investment objectives — otherwise known as impact investing.

Our Sustainable Investment Declaration outlines our approach and commitment to helping you make a positive sustainable impact while targeting favourable returns.

Common questions investors are asking themselves:

  • Where am I on my sustainability journey?
  • Where are managers on their journey?
  • What practical changes can I make today?
  • How can I ensure that DEI is a priority for managers and integrated in strategies?
  • Can I contribute towards the greater good and meet my objectives?
  • How can I navigate the risks and opportunities presented by climate change?

Sustainable investment solutions for institutional investors

We can work with you to build and execute your sustainable investment strategy, helping you meet your overall sustainability objectives. As one of the largest global investment consultants and fiduciary management providers, we have access to a universe of managers, asset classes, and opportunities. We can evaluate your portfolio through multiple lenses, ensuring every investment decision you make considers the most pressing global themes like climate change and the best way to access them.
  • Responsible Investment Total Evaluation (RITE)

    This tool provides an evaluation across your beliefs, policies, processes and portfolio. It shows you how you’re doing on a scale from A++ to C and compares you to your peers. It can also monitor your improvement over time.
  • Impact investing

    We can help you build a robust impact investing strategy designed to accelerate real-change and whilst helping you pursue stronger returns for your portfolios.
  • Diversity, equity and inclusion (DEI)

    We can help you define and build a diversity, equity and inclusion (DEI) investment strategy that seeks to deliver positive change and stronger portfolio outcomes.

Four important considerations defining your sustainable investment approach

There are many ways to approach ESG within a portfolio. The following are the main strategies, which can be implemented individually or in combination. We believe success requires a mixture of these elements:

  • Integration: Include ESG factors in investment decisions.
  • Investment: Allocate to sustainability themes or impact investments as a source of new opportunities.
  • Stewardship: Engage with underlying companies and policy makers, and exercise your right to vote.
  • Screening: Avoid companies that are not aligned with your values.

Climate change is a pressing issue for investors. Institutional investors, such as pension funds, financial institutions, insurers, wealth managers, endowments, and foundations, hold trillions of dollars in assets in their portfolios. In a decarbonising economy, these assets are highly exposed to climate transition risks.

Climate change scenario modelling

Our global partnership with Ortec Finance has enabled us to provide a diverse set of institutional investors with rigorous analysis of the climate crisis. Our scenario modelling uncovers emerging opportunities, helping investors decide how they want to influence the climate crisis and how to make their portfolios resilient against future challenges.

Our quantitative analysis, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), is grounded in economics and science. This analysis provides a deep level of granularity, allowing asset owners to explore to what extent climate impacts might be priced across asset classes and sectors to assist with strategic decision making. The long-term projections it provides are integrated into Mercer’s capital markets assumptions across all our services. In the UK, the analysis supports the requirements in the Climate Change Governance and Reporting Regulations.

DEI considerations are an increasingly important consideration within sustainable investment portfolios. We incorporate DEI into our evaluation process for investment managers. We help investors position their investment portfolios towards managers and businesses that truly promote the diversity and power of their people.

More investors are exploring the intersection of positive environmental and social outcomes and delivering on investment objectives. We can help you identify managers that are investing in companies improving the world and generating sustainable returns. We call this impact investing.

Actions and tools to help amplify your sustainable investment strategy

We work with organisations of all sizes, from those that are acknowledged experts right through to those who are starting their journeys and we take our clients through a step-by-step pathway from formulating beliefs and policies, designing processes and then helping to implement them in portfolios. It’s a journey tailored to their specific goals.
This diagram is a picture of the four stages of the sustainable investment pathway - beliefs, policy, process and portfolio.

It is important to gain insight into how well you are currently integrating ESG considerations into your overall investment decision making.

Mercer’s Responsible Investment Total Evaluation (RITE) approach

Our RITE approach will evaluate your integration of ESG into scheme governance and investment decision making across each area of Mercer’s Sustainable Investing Pathway (Beliefs, Policy, Process, and Portfolio) to score your scheme on a scale from A++ to C and allows comparison to your peers. This tool also provides interventions to improve your ESG integration and the ability to monitor your improvement over time.
Once you have a clear picture of where you are on your journey, you will need to review your goals against your beliefs, policies, processes and overall portfolio approach. This will help you move forward and fill any gaps specific to your circumstances. Below we illustrate next steps for an investor that wants to start their net zero journey.

Our transition framework, Analytics for Climate Transition, will help you establish your current emission baseline while assessing how to make reductions, set targets, and develop an implementation plan that can be integrated within your strategy and portfolio.
Graphic shows timeline from 2020 to 2050. 2020 shows current emissions baseline with managing ‘grey’ risks. Between 2020 and 2030 shows the portfolio possibilities with steward the ‘in-between’ and target and timings with target ‘green’ solutions. The transition plan for implementation is integration, stewardship and investment.

After identifying areas for change, we can help you understand how the transition to a low carbon economy might affect your portfolio. What will be the impacts on your asset classes and managers? How can you increase your allocation to climate solutions? Our team of experienced specialists across the globe can help you answer these questions, drawing on our detailed knowledge across asset classes, managers, and strategies.

When reviewing your portfolio and action plan, we will help you understand the capacity of your managers and underlying companies to transition to a sustainable strategy. Our Analytics for Climate Transition tool calculates your current emissions baseline, identifies areas for possible reduction and recommends a transition plan by asset class.

Our commitment to help make a difference

Our commitment to net-zero by 2050

Sustainability is at the centre of our investment approach and our firm as a whole. We have committed to a target of net-zero carbon emissions by 2050 across the majority of our funds. We expect to reduce portfolio carbon emissions by 45% from 2019 baseline levels. Here, Mark McNulty, our International Head of Clients, explains more.

We have identified clear goals underpinned by accountability

  • We have committed to hit net-zero carbon emissions by 2050 for our UK, European and Asian clients with discretionary portfolios and for most of our multi-asset funds domiciled in Ireland.
  • We will produce annual progress reports on emissions, alongside carbon intensity reports.

Our latest insights on sustainable investment

    Leverage our breadth and depth

    We have more than 20 years of experience helping clients invest sustainably and finding investment opportunities to balance good returns with positive change. We launched our proprietary ESG ratings platform for sustainable investments in 2008, covering over 4,000 strategies. We have built a suite of frameworks and tools to help you identify optimum sustainable investments and enhance your sustainable portfolio construction.


    Investment consultant of the year 2023

    Mercer has been recognised as the investment consultant of the year by Environmental Finance for pioneering sustainable investment and assisting more than 25 institutional investors around the globe to better assess their exposures to climate transition risks. 

    Talk to us

    Get in touch to learn more about our sustainable investment strategy solutions.