Key Components of an Investment Policy Statement

A financial advisor is meeting with a new client, David, who is 40 years old and has a net worth of $2 million. David is seeking to create an Investment Policy Statement (IPS) that aligns with his long-term financial goals and risk tolerance. He is particularly interested in investing in sustainable companies and is willing to accept moderate risk for potential growth. He has a time horizon of 15 years until he expects to retire, and he prioritizes capital preservation along with growth. In this context, what would be the most essential component to include in David's IPS?