Responsible Investor

of the principles, which offers ‘best practice’ progress comparison on the principles ranging from drawing up responsible investment manifestos to including ESG criteria in investment mandate proposals (RFPs). But, at the anual meeting of signatories to the UN PRI in Geneva last week, the scorecard exercised minds the most. The PRI decided to release the results after the conference in case it dominated the event. One telling question was whether asset managers would begin using their UN PRI ‘score’ as a marketing tool. A signatory said: “There is a fear that this could undermine the principles. The issue is that the filling out the questionnaire is voluntary and self-regulated, which could open it up to misinterpretation.”
Jane Ambactsheer, global leader for responsible investment at Mercer, said the questionnaire had been developed in collaboration with investors and fund managers: “It is an indicative not an absolute scoring system and this should be emphasised when looking at it. It is not a formal stamp of approval.”
Nada Villermain Lecolier, head of manager selection and SRI at the €32bn French reserve fund, welcomed the scorecard. She said pension funds needed quantitative evidence with regards to fund manager commitment on ESG issues to be able to make informed mandate decisions.
She said the FRR was likely to publish its own PRI score but would probably wait for three years of results in order to give what she said would be “consistent information”.
Michael Musuraca, a trustee with the New York City Employees Retirement Scheme (NYCERS) and member of the PRI board, said:

“We were sensitive to the scoring issue. We didn’t think that everything would be hunky dory and that we would meet once a year and show how good we are. This is a first step that should encourage investors to get more “granular” with the results and start asking more not fewer questions.”
Away from the scorecard, the most promising aspect of the PRI review is that 83% of investment manager signatories and sixty seven per cent of asset owners – pension funds for the most part – have adopted formal policies on responsible investment.

“It is an indicative not an absolute scoring system.”

The PRI report said more than half the respondents to its survey had reportedly taken steps to integrate their formal policy into actual investment decisions.
Just under half of asset owners (44%) said they considered responsible investment criteria when they selected their fund manager.
Half of these said the weighting of responsible investment criteria was significant to the decision on which manager to hire.
Only 20% of signatories said ESG issues had no bearing on investment manager hires.
Outside of listed equities, integration of ESG into investment decisions falls off somewhat.
About a quarter of investment managers and 12% of asset owners said they included relevant criteria “to a large extent” in their fixed income investment decisions. In real estate, the figures are 6% for fund managers and

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