Investment consultants must now demonstrate that climate-related capabilities previously considered aspirational have become core components of their offering, according to updated industry standards. The Investment Consultants Sustainability Working Group (ICSWG) has revised its Climate Competency Guide to reflect a landscape where the “leading” practices of 2021 are now viewed as “business as usual” for advisers to institutional investment firms.
The updated framework provides a structured approach for asset owners to evaluate their investment consultants across five key themes: firm-wide expertise and commitment, individual consultant knowledge, the sophistication of tools and software, thought leadership, and the assessment of investment managers. By distinguishing between typical and leading indicators, the guide allows trustees to differentiate between baseline service delivery and proactive leadership in climate-related risk management.
The 2026 guidance also recognises the “complex interplay” between climate change and broader natural and social factors. Advisers are increasingly expected to demonstrate how climate risks intersect with biodiversity and social impacts, providing more holistic advice that keeps pace with evolving regulatory expectations. This evolution reflects the growing maturity of institutional portfolios, where expertise is required to manage systemic environmental and social risks alongside financial performance.
The revision is designed to help trustees and asset owners of all profiles hold their advisers accountable. By using the framework to set specific performance metrics and objectives, trustee boards and investment committees can ensure their consultants possess the expertise and tools necessary to support evidence-based decision-making.
“As the understanding of climate-related issues continues to evolve, it’s important that asset owners can effectively evaluate the capabilities of those giving them advice,” said Simon Jones, Co-chair of the ICSWG and Head of Responsible Investment at Hymans Robertson.
“Updating the framework to reflect changing expectations is therefore vital to ensure that evolving best practice continues to be integrated into advice. The input we have received from asset owners and other stakeholders has been critical to this process and we hope the guide will remain a helpful and widely used resource.”
In updating the guide, the ICSWG consulted with a range of industry stakeholders including Pensions UK, the Pension Regulator and the Trustee Sustainability Working Group.
The ICSWG is a group of UK investment consultancy firms focused on building consistency, enhancing standards, and supporting practical approaches to sustainable investment practices, on behalf of asset owners and the investment industry.
