Q and A: Talking Sustainability with Mike Clark

Windmill

In this article, Shane McCullagh interviews Mike Clark. Mike is an actuary with a long career spanning life insurance, teaching and investment. He now runs an independent advisory firm, Ario Advisory. Shane asks Mike about his work as well as focusing in on the role of investment in tackling climate change.

Can you talk briefly about your career to date? How did you end up focusing on responsible investment and sustainable finance issues?

I started off in a traditional actuarial role in a life insurance company before moving to the City, where I worked as an investment analyst within equities. Later, I was then head of fixed income through the ‘Big Bang’ in 1986. Following that I worked for the Institute of Actuaries as a staff tutor for some years.  I joined Russell Investments in January 1995 and went on to lead the institutional client group. I became Russell’s first Director of Responsible Investment in 2013 before being made redundant in 2016 as a result of M&A activity. At this point I decided this was all far too enjoyable to give up. So, I set up Ario Advisory. I work in three areas: some formal positions, some paid client work and I spent a lot of time pro-bono engaging with the financial system.

What are the kind of projects that you are working on at the moment and the areas you are focussing on?

One of the projects I am involved in is the Coalition for The International Platform for Climate Finance (IPCF). I was until recently a non-executive director for the Brunel Pension Partnership. I am involved in the Net Zero Asset Owner’s Alliance. I have written a short piece published by Actuaries for Transformational Change (ATC). Another involvement is the Taskforce for Pension Scheme Voting Implementation (TPSVI), which aims to support trustee-directed voting. I am also involved in the Red Lines Voting guidelines, started some years ago by AMNT (Associates for Member Nominated Trustees).
I work a lot with COP26. As an example, I am working with Nigel Topping (UK government Climate Champion) and his team crafting pathways for actors in the finance and investment sector. I represent the actuarial profession on the Oxford Smith School Sustainable Finance Global Advisory Council. They do academic research around system change relating to sustainable finance.  Part of what I do is promote the good work of others in order to accelerate change.

How have you seen attitudes change towards responsible investment and sustainable finance over the course of your career? What do you think have been the drivers of this?

The main reason for a lot of the change is that the finance industry realised it is there to serve society. If you have been involved in this area for a while, you would see that it has been accelerating, but perhaps not that many people noticed until recently. COP26 has definitely focused minds on climate issues. 

Do you see any potential issues arising from the current heightened focus on climate change? 

The problem is that there is still not enough being done on climate change. One of the problems is that market participants are brought up on standard finance theory of alpha, beta, tracking error and related concepts. It is quite hard to bring the kind of thought processes we need on climate issues into that existing mindset.

Where do you think investors should be focussing their attention with regards to responsible investment? Are there any emerging themes you think will be significant that are currently being overlooked?

Climate! Climate! Climate! It is hard to talk about overlooked themes because there are only limited resources available to tackle these issues. I think that the next theme that will be looked at closely will be some strand of inequality. Conversations should be had about where value creation takes place. Are some people having too much of the value they create extracted for someone else’s financial gain?

In your view, what role should finance play in the transition to net-zero and a more sustainable society?

The purpose of finance should be to serve what society wants to happen. Society wants net zero and more sustainability. So, we have to find a way of transforming the financial system into serving those goals. 

What makes you feel passionately about climate change and sustainability issues?

I have seven surviving grandchildren, and my wife and I have five children, so it is their world we are stewarding. We want to be good ancestors. Also, it is a fascinating intellectual challenge. Hard, but enjoyable.

What is your advice for actuaries or investment practitioners who want to get more involved in sustainability?

If you are in a job, look into initiatives like ShareAction, ClientEarth or Carbon Tracker. Go to one or two of their seminars, work out how they are planning to change the world and think about how you can get involved. If there is something that interests you and you work in finance, figure out where the two come together and read up about it.

Do you have any top tips for widening your knowledge base?

If you are a self-motivated learner, once you read something you then know where you want to get to next. I wrote the climate reading guide with that in mind. We tend to learn about what interests us, so follow your interests.

Do you have any interesting plans or hopes for the future in this area?

I hope for more of the same. I am very fortunate that at this age I am blessed with skills I can use, enjoyably. So, my plans and hopes for the future are more of the same. Helping, in a small way, to make COP26 a success this year is a specific goal because that will be important for our children, our grandchildren and their future.