As sustainability expectations rise and stakeholder scrutiny intensifies, pension funds are rethinking their reliance on standard market indices. The shift toward customised benchmarks reflects a growing need to align investment strategies with ESG commitments while improving transparency. 
This presentation will examine how passive investing increasingly requires active design. It will explore how decisions such as exclusions, ESG tilts, and carbon reduction pathways are embedded into clear, rules-based methodologies. It will also address the practical trade-offs involved in index construction, and how investors can maintain strong fiduciary oversight through robust governance, product ownership, and monitoring frameworks.