Adding an ESG-lens to portfolio management and governance can not be done overnight. As the central priority for two-thirds of asset owners globally, the question is what projects are we de-prioritising in order to make room for ESG?

With new asset classes, new data types and new regulatory requirements all impacting asset owners at once, it is no longer enough to react to every challenge as it arises. Instead, ‘operational agility’ and the ability to scale needs to become a core facet of every asset owner’s infrastructure.

It is no longer enough for asset owners to view their portfolio performance on the basis solely of returns. Today, the ability to view investments through a second lens of sustainability (and to manage external providers) is crucial.

How do we define scale in the world of asset owners? Viewed solely on a cost basis, there seem to be diminishing returns as asset owners grow beyond USD10bn in AUM. But how does this change when taking into account operational risk and governance?

In an era of data and digitisation, Excel remains pervasive as the main platform for tracking and managing a single view of asset allocations for asset owners – ahead slightly of Master Custodians. Whilst larger firms (and those managing their own investments) do have dedicated systems in place, the scope for improved data management is clear across the industry.