The Church of England’s National Investing Bodies – the £5.2bn (€6.3bn) Church Commissioners, the £1.3bn Church of England Pensions Board and the CBF Church of England funds managed by CCLA – have chosen MSCI ESG Research for global ethical screening after a competitive tender process.
MSCI will take over from incumbent EIRIS, the UK-based environmental, social and governance research house. The Church bodies had used EIRIS for around three and a half years.
MSCI has also been taken on by CCLA, the specialist church and charity investor, though it will keep EIRIS on its roster for UK screening services for its charity clients.
In addition, EIRIS – whose CEO Peter Webster was elected to the Advisory Council of the Principles for Responsible Investment last year – will provide FTSE350 engagement support to CCLA, which provides the secretariat to the Church Investors Group. “We are delighted that CCLA sees EIRIS as central to their work,” said Webster.
In a statement, MSCI said the investors have subscribed to its “full suite” of products including its Business Involvement Screening Research and MSCI ESG Impact Monitor. The screening will cover exclusion criteria such as tobacco, adult entertainment, gambling, defence and weapons.It will also entail bespoke screening for high interest rate lending – a hot button issue given Archbishop of Canterbury Justin Welby’s high profile interventions on payday loans last year. For CCLA’s Charity Ethical Fund clients, MSCI will screen for coal exposure.
The Church investors and CCLA have also subscribed to MSCI’s Intangible Value Assessment (IVA) ratings which analyse companies’ material risks and opportunities arising from ESG factors. Financial terms of the arrangement weren’t disclosed.
Edward Mason, Secretary to the Church of England Ethical Investment Advisory Group, said the Church bodies have “a very broad suite of ethical investment policies”. He added: “We are delighted by the commitment that MSCI ESG Research has shown to meeting our changing needs.”
Helen Wildsmith, Head of Ethical and Responsible Investment at CCLA, cited MSCI’s global reach, and provision across bonds as well as listed equities as important factors in choosing the US-based provider.
Last month the giant French state fund, the fonds de réserve pour les retraites (FRR) selected EIRIS to analyse the extra-financial risks of its global equity portfolio, including small and mid-caps, and its corporate fixed-income portfolio. And last September it was announced that EIRIS would cease working with index firm FTSE on the FTSE4Good sustainable index family.