There should be consistent, timely and proactive communication between the teams, which can be helped by regular meetings between teams and close proximity. The environment must be conducive to openly sharing and debating ESG and investment research and information amongst the teams, especially on ESG materiality and ESG impacts on investment valuation and decisions. Portfolio managers may not have time to engage with companies on ESG factors.Īn ESG team conducts the ESG analysis, which the investment teams integrate into overall investment analysis and decisions. Portfolio managers may not be sufficiently familiar with ESG issues and trends to identify material ones.Įngagement activities on ESG issues will include portfolio managers. Portfolio managers may not have time to conduct comprehensive ESG research.ĮSG issues are included in discussions, alongside other material investment risks and opportunities. ProsĮSG factors are included within the portfolio manager’s research, alongside other material investment risks and opportunities. Portfolio managers must allocate a sufficient amount of time to researching ESG issues and the latest ESG themes, and they may choose to receive training to deepen their understanding. Portfolio managers and investment analysts conduct the ESG analysis and integrate it into overall investment analysis and decisions. There are two common options for incorporating ESG integration into the organisational structure: Integrated investment teams If senior management does not believe that integrating ESG can add value, it is unlikely that sufficient budget for resources and personnel will be allocated for it to have an impact on investment decisions. The first step, applicable to all investors, is to get senior management buy-in regarding the benefits of integrating ESG factors into investment processes. Private retirement systems and sustainability.UN-convened Net-Zero Asset Owner Alliance.Environmental, social and governance issues.Strategy, policy and strategic asset allocation.Collaborative stewardship initiative on social issues and human rights.An introduction to responsible investment.PRI Digital Forum: Principles to Practices.PRI Digital Forum: Driving Meaningful Data.What are the Principles for Responsible Investment?.
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