Kathy Ryan leaves M&G after two years as CSO

Kathy Ryan, who became the first Chief Sustainability Officer at investment management firm M&G in 2023, has left the company.

An M&G spokesperson told CSO Futures that Ryan has decided to “pursue a new direction in her work”, but declined to confirm whether the firm would seek a replacement or eliminate the CSO position.

M&G Investments Head of Sustainability Michael van der Meer, who was hired just a few months before Ryan, remains at the firm. 

Before the CSO position was created, sustainability at the nearly £346bn AUM firm was the responsibility of Chief Financial Officer Kathryn McLeland, whom Ryan reported to when she joined.

Evolution of M&G sustainability strategy

M&G’s sustainability strategy revolves around reducing operational emissions and integrating ESG considerations into the investment policy. 

The firm has set portfolio decarbonisation targets: by 2030, it aims to have 50-70% of financed emissions (Scope 1, 2 and 3) assessed to be ‘net zero’, ‘aligned’ or ‘aligning’.

In 2024, M&G Investments launched an updated ESG Integration & Sustainable Investment Policy to provide greater clarity and transparency on the approaches and resources in place to embed sustainability considerations into the investment process. 

“Given the breadth of asset classes we invest in, our investment managers tailor their approach to ESG integration taking into account the specific portfolio construction,research and investment processes used by each team. We seek to integrate ESG across all investments as far as we are able and where it is financially material. We are also applying a sustainable investing lens to portfolio construction in a number of our funds, offering a range of strategies which can cater for clients’ financial objectives alongside their sustainability preferences,” the firm said in its latest annual report.

Reduction of ESG criteria weighting in remuneration

However, the same year, M&G adjusted its long-term incentive plan (LTIP) arrangements, lowering the weighting of ESG criteria in remuneration. The LTIP for 2024-2026 has an overall weighting to sustainability-related targets set at 25%, evenly divided between operational emissions reductions, gender diversity targets, and ethnicity diversity targets.

But for the 2025-2027 LTIP, M&G has set this weighting at 15%, focused on gender and ethnicity targets only. “While the emissions-based measure will remain a part of the long-term executive remuneration plans until 2026, it has not been included for 2025-2027 period on the basis that good progress has been made on operational emissions, and that investment-related measures for future awards will be carefully considered during 2025 following the update to our sustainability strategy,” the firm explained.

M&G is targeting a 46% reduction in Scope 1 and 2 (market-based) and Scope 3 (business travel) emissions by 2030, from a 2019 baseline.