IPE Awards 2021: Brunel wins on climate, innovation and portfolios
I am delighted to report that Brunel has won three awards at the 2021 IPE Awards in Madrid. These are enormously respected awards open to entrants across Europe. (Brunel’s IPE awards come on the heels of awards from Pensions For Purpose and Environmental Finance.)
It is hard to think of a set of investment awards that better validates the rigour and innovation that characterise the work of our broader investment team.
The three awards are for:
- Climate Related Risk Management
- Innovation
- Portfolio Construction & Diversification
“The IPE Awards are the gold standard for Europe’s pensions sector – winning three of them in one year is an enormous accolade for us,” said Denise Le Gal, Chair of Brunel Pension Partnership. “It has been a remarkable year, with the listed funds all now launched alongside the new Paris-aligned benchmarks. A very big thank you to all the staff at Brunel for your work, and to IPE for this invaluable recognition.”
Climate Related Risk Management
IPE describes this award as a “highly specialised category that relates specifically to the carbon footprint your investments create and how you develop solutions to reduce it as part of your long-term overall strategy and objectives”.
Our submission emphasised our enabling involvement in the work of the IIGCC – most recently, the launch of its Paris-Aligned Investment Initiative and of its Net Zero Investment Framework. It also highlighted the launch of new portfolios that target climate in innovative ways; the publication of our first TCFD Climate Action Report; progress on carbon efficiency; progress on social impact; and the launch of the new Brunel-FTSE Russell Paris-aligned benchmark series.
“We were over the moon to win this award for the second year in a row, given what we know of the rigour IPE applies to its choices,” said Faith Ward, Chief Responsible Investment Officer at Brunel. “There has been so much progress by our industry, and most particularly by asset owners, so we are delighted at this recognition of the progress we have made by working with multiple external partners, from our asset managers to the IIGCC.”
Innovation
Innovation is an urgent need if the financial sector generally is to rise to the challenge of climate change – there are few areas where this is more urgent than in passive investing. IPE describes this category as “popular and very competitive”, due in part to the breadth of innovations that can be included.
Our submission focused on the pioneering work Brunel conducted in partnership with FTSE Russell to build two new series of Paris-aligned benchmarks. Eager to find more sophisticated climate-based index approaches as part of how we achieve Net Zero, we designed new benchmarks that reflect a more holistic approach to “Paris alignment”, accounting for a wide range of climate factors and new economy investments, while ensuring they were sufficiently flexible to enable evolution as data improves.
“The benchmarks project has been an enormous focus for us but it was never only meant for us,” said David Cox, Head of Listed Markets. “The broader market urgently needs passive solutions for Net Zero investors. We recognised that the problem we faced was widespread – and we hope the solution can be widely adopted as a result. This award is enormously valuable to us and will doubtless help asset owners and managers take note of the new opportunity.”
Portfolio Construction & Diversification
In this category, IPE was keen to know the long-term objectives, asset class diversification, and construction portfolio of the portfolio in question.
We chose to focus on our Multi Asset Credit portfolio, giving detail on how we had designed it in terms of its regional weightings, asset class weightings, asset class sensitivities, and on how we used non-parametric statistical modelling, among other areas. The portfolio shows strong diversification across fixed income sub-classes, and had strong incorporation of our RI and climate principles at every step of the construction and manager appointment process – as it does for ongoing manager monitoring.
“The MAC is very different from our other portfolio offerings, as it enables clients to reduce risk while still harnessing diversified credit’s capacity for reasonable returns,” said David Cox. Head of Listed Markets. “We were delighted to see the fund receive such significant recognition with this award, and I must just praise the investment team for delivering something that achieves client aims on risk-return and climate in specialist bond sectors.”