Responsible Investor

evaluated according to their integration of environmental considerations into risk management, stock selection, company engagement, and proxy voting and annual environmental carbon foot-printing. Relative performance between managers will also be separately benchmarked using corporate governance and responsible investment indices.
The Environment Agency has been a leader in responsible investment since 2005 when it replaced a poorly performing strategy of three balanced managers for ten specialist managers employing an environmental, social and governance overlay strategy. In the first year of the new strategy, the fund beat its benchmark by 0.8% and increased its solvency margin by 4%.

Year two was better: the fund was 1.2% up against its benchmark and recorded a further 3% increase in solvency. Eight of the fund’s managers exceeded their benchmark and four beat their performance targets. The fund is also carrying out reviews of infrastructure, sustainable forestry, private equity and clean tech to decide if it could make new allocations to these asset classes. The fund was advised by Mercer on strategic investment and fund manager selection. Rathbone Greenbank provided specialist advice on sustainable investment and bfinance assisted with the evaluation and selection of fund managers. Responsible Investment Metrics was also used for the selection of mandates.

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