Responsible Investor

Eiris’ work also includes comparative guides to ethical retail funds: “One of our aims is to help individual investors invest responsibly, even if our comparisons have sometimes been controversial. SRI retail funds often publish quite detailed information on what stocks they hold and we encourage this. The more people properly understand what they are investing in, the better for the sector. One remaining difficulty is for investors wanting to invest ethically to get the right advice. Some independent financial advisors (IFAs) are well versed in SRI and members of associations such as the UK Social Investment Forum (UKSIF), but it’s a challenge to convince more general IFAs not to put their clients off the subject.”
He says the institutional field has faced, and started to surmount, the same difficulties: “Five years ago everyone said the SRI case was hopeless because the consultants were a block, but that has changed. It’s great the consultants are getting into it.”

As such, he believes the future looks promising: “The UN Principles for Responsible Investment is huge. I say that because of the experience of the UK where the Pensions Act of 2000 (which obliged disclosure of a Statement of Investment Principles including SRI) got pension schemes asking themselves what they should do. One answer they didn’t come back with was to do nothing. In fact, two clear strategies came back: ‘corporate engagement’: usually delegated to the fund manager, and ‘integration’, to get fund managers to include ESG issues where they affect financial performance. The PRI has taken those two and added a regular reporting process on ESG. I know a lot of pension funds that now say they are going to have to address this properly. Crucially, the PRI also has sign-off from top-level management in asset owners and fund managers. All the projects that have done useful things in SRI have been a combination of good people and serious top-level support.”

Not a member? Register here »