Responsible Investor

number of multi-stakeholder groups to identify RI good practice. However little work has been done regarding assessment models and the creation and provision of tools to measure implementation. Highly commendable work continues to be done within the UNPRI process and others. But we believe there is a place for an independent, credible and authoritative system to assess and benchmark manager RI performance that will add to and support this evolving debate.
As the focus on RI by asset owners continues to rise, fund managers face the challenge of how to incorporate ESG analysis into their existing investment management process, client reporting and the organisation’s governance. As recent reports have shown, some have made considerable progress towards meeting this challenge. Many, as yet, have not.
RI Metrics, a new organisation whose focus is the development of a range of RI related services has been working for the past 18 months with a number of leading European asset owners and managers with the objective of developing a model and methodology for evaluating RI best practice in mainstream asset managers.
In working with its stakeholders, RI Metrics have developed a best practice model which is based on the principles that a manager should have

• A developed and implemented strategy towards, and adequate resourcing of, RI issues within a fund manager’s organisational structure,

• An effective process of investee company engagement which is orientated towards results rather than effort and provides for a better understanding of the risk and opportunity profile of investee companies,
• Clear integration between the work of the investment professionals and those directly involved in RI issues within a fund management organisation and that appropriate environmental, social and corporate governance research is made available to the investment professionals,
• A voting record which matches the fund manager’s declared policies, and
• Evidence that the fund manager applies the same standards of openness and transparency to itself as it expects from its investee companies.
Not all asset owners would weight such principles of equal importance. Many asset owners may only wish to see adequate practices in one or two of these areas to meet their specific needs, so flexibility and pragmatism is important in developing meaningful and useful outputs.
As RI Metrics assesses and scores fund mangers and makes this information available to asset owners, consultants and others, this comparative information on manager strengths and weaknesses should stimulate discussion amongst pension fund trustees and provide for some challenging questions being put to some of the world largest fund managers.
Will Oulton is co-founder of RI Metrics: will.oulton@rimetrics.com
RI Metrics site

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