Active engagement, manager selection and human capital: Balancing risk-adjusted returns over time

In this episode, Cambria Allen-Ratzlaff , Interim CEO at the PRI, is joined by Mark Anson , Chair of the Investment Committee, and Hershel Harper , Chief Investment Officer at the UAW Retiree Medical Benefits Trust . A PRI signatory since 2010, the Trust has long been recognised for its leadership in responsible investment, stewardship and manager engagement. Together, they explore how a large, closed pension plan integrates responsible investment into fiduciary decision-making, covering human capital management, energy transition risks, data centres, manager selection and the role of ESG data. Overview Drawing on decades of experience across public pensions, endowments and foundations, Mark and Hershel reflect on how responsible investment has evolved from a niche concern to a core part of managing long-term risk and return. The conversation highlights how the Trust approaches stewardship not as a values exercise, but as a practical way to strengthen governance, resilience and performance, always grounded in its obligation to deliver healthcare benefits for retirees. Detailed Coverage Human capital as a core asset The guests discuss why workforce practices, board quality and leadership development are material investment issues. From employee training and compensation to board diversity and skills, effective human capital management is framed as fundamental to long-term value creation. Collective engagement and investor leadership Mark and Hershel explain why large asset owners must collaborate to drive change. Initiatives such as the Midwest Investors Diversity Initiative demonstrate how coordinated engagement can improve board diversity and corporate sustainability while supporting better business outcomes. Energy, water and data-centre risk The discussion turns to energy policy and the growing demand driven by AI and data centres. The guests outline how the Trust evaluates resource efficiency, water use, worker safety and community impact, recognising the need for “all-of-the-above” energy solutions delivered responsibly. Manager selection and Capital Connect Hershel introduces Capital Connect, the Trust’s forum designed to broaden access to diverse and emerging managers. Both guests stress that expanding the opportunity set improves risk-adjusted returns, and that investing with diverse managers is not concessionary, but disciplined and performance-driven. ESG data, fiduciary duty and decision-making Mark and Hershel reflect on their recent research into fiduciary responsibility and inconsistent ESG data. They explain why ESG ratings vary so widely, and why asset owners must first define their objectives, regulatory constraints and risk priorities before selecting data tools. Context matters A recurring theme is that responsible investment is contextual. Different investors (pension funds, endowments, foundations) face different liabilities, regulations and time horizons, shaping how ESG considerations are applied in practice. For more information about making the case for responsible investment, check out our database: Chapters 00:00 - Introduction & Backgrounds 03:29 - Human Capital Management & Board Diversity 08:55 - Midwest Investor Diversity Initiative 11:41 - Energy Policy & Data Centers 18:17 - Water Resources & Community Impact 19:39 - Capital Connect & Diverse Managers 26:40 - Fiduciary Dilemma & ESG Integration 30:42 - ESG Data Challenges & Rating Agencies 37:19 - Investment Outlook & De-risking Strategy 45:48 - Closing Thoughts on Responsible Investing Disclaimer This podcast and material referenced herein is provided for information only. It is not intended to be investment, legal, tax or other advice, nor is it intended to be relied upon in making an investment or other decision. PRI Association is not responsible for any decision made or action taken based on information on this podcast. Listeners retain sole discretion over whether and how to use the information contained herein. PRI Association is not responsible for and does not endorse third parties featured on in this podcast or any third-party comments, content or other resources that may be included or referenced herein. Unless otherwise stated, podcast content does not necessarily represent the views of signatories to the Principles for Responsible Investment. All information is provided “as is” with no guarantee of completeness, accuracy or timeliness, or of the results obtained from the use of this information, and without warranty of any kind, expressed or implied. PRI Association is committed to compliance with all applicable laws. Copyright © PRI Association 2025. All rights reserved. This content may not be reproduced, or used for any other purpose, without the prior written consent of PRI Association.

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Active engagement, manager selection and human capital: Balancing risk-adjusted returns over time is an episode from PRI Podcasts by The PRI.

This episode is 45:09 long.

This episode was published on Jan 27, 2026.

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