Project Introduction
Over the last four months, our team of graduate consultants collaborated with an asset management firm responsible for supervising assets valued at $652 billion, spread across 51 locations spanning 25 countries. After the initial phase of the project, the Literature Review, we concentrated on four distinct sectors and identified five physical climate risks, including heat stress and fire, among others. Following the mid-term presentation, we advanced to the second phase of the project, the investor framework. During this phase, we formulated key indicators aimed at assessing company preparedness for the impacts of physical climate change.
Midterm to Final Presentation
Between mid-March and the project's conclusion, our primary focus was on crafting an investor framework for two funds, as advised by the company. This stage proved to be the most challenging, as we grappled with determining which indicators to incorporate into the investor framework. While we eventually managed to streamline the selection to 17 indicators, this process did result in a loss of one or two weeks.
Changing Expectations of Clients
A notable challenge we faced was the shifting expectations of the client following the completion of the literature review. As we progressed in developing Key Performance Indicators (KPIs) for the company assessment framework, the initial plan was to formulate Yes/No questions supplemented by qualitative inquiries to facilitate the development of a scoring mechanism. However, the client expressed a desire for qualitative questions instead, focusing on categories such as i) Risk Management ii) Governance iii) Targets & Metrics. While incorporating qualitative analysis would offer more comprehensive insights into each company, it posed a complication for implementing a scoring system.
Impact Investing
The past three months have been both challenging and rewarding, providing me with valuable insights into Impact Investing and allowing me to enhance my client relationship skills. Looking back, one of the most significant lessons I've learned is the importance of acknowledging that disagreements with clients are natural and acceptable. I believe that if we had communicated certain aspects of the project to the client and not always deferred to their preferences, we could have delivered the final product more smoothly and with fewer complications.