Once intent is clearly defined, organizations must determine how far and how fast they wish to progress. Leadership should agree on a target level of alignment and establish a realistic timeline for achieving it. For portfolios with significant exposure to illiquid assets, this transition may occur over several years.

Equally important is establishing clear thresholds and guardrails. These decisions often involve nuance, such as determining acceptable levels of exposure to certain industries or activities. Many organizations use external indices to help create consistent, defensible standards. Mercer helps clients assess these tools and tailor thresholds that align with both values and portfolio objectives.

Finally, the success of…