Only Half of UNPRI Managers Follow Principles, Says Consultant

A Lane Clark & Peacock survey found that asset managers who say they’re committed to environmental, social, and governance issues don’t necessarily behave accordingly.

Asset managers might talk the talk of “responsible investing,” but that doesn’t mean they walk the walk.

A recent survey by UK-based consultant Lane Clark & Peacock (LCP) found that even signatories of the United Nations-backed Principles for Responsible Investment (PRI) often failed to integrate environmental, social, and governance (ESG) considerations into their investment processes.

“Just because a manager signs up to the PRI doesn’t necessarily mean they take it seriously.”The survey, which scored over 100 managers based on the underlying levels of commitment and resources they have dedicated to ESG issues and active ownership practices, found that just under half of PRI signatories actually followed through on these promises.

“Just because a manager signs up to the PRI doesn’t necessarily mean they take responsible investment seriously,” said Mark Nicoll, a partner at LCP. “There remains room for the rhetoric to catch up with reality.”

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

Asset owners and trustees need to critically examine managers’ ESG credentials to determine which actually invest according to these promises, LCP said. These credentials can include integration of ESG in the investment process, shareholder voting and engagement, and fee transparency.

“It takes relatively little effort for an investment manager to give the appearance that they are concerned about responsible investment issues,” Nicoll said. “This can easily be done by producing glossy marketing material, by joining the relevant industry groups, or indeed by signing up to the Principles for Responsible Investment.”

But while not all PRI signatories scored well, the group as a whole still did better than managers who had not signed the PRI. Not one of the non-signatories earned a positive score from LCP. In total, 33% of managers received positive scores, while 49% of PRI signatories did.

“Many—though far from all—of those managers displaying a commitment to responsible investment are backing this up by integrating these considerations into their investment processes,” Nicoll said.

lcp esgSource: Lane Clark & Peacock’s “Investing Responsibly” 

Related: The Explosive Growth of ESG Managers & Consultants: A Barrier to ESG?

NY State Pension To Bolster Investment Team

The $178 billion fund is looking to fill positions in risk, fixed income, and real assets.

The New York State Common Retirement Fund is recruiting for multiple open positions in its Albany and New York City investment offices.

The $178.3 billion fund, the third largest public pension in the US, is seeking talent in risk, fixed income, and real assets.

“The fund is consistently ranked as one of the top public pension funds in the country, and our funded ratio is among the best,” said CIO Vicki Fuller in a statement. “As we look to add to our investment team, we want to tap the best that New York and the financial community have to offer.”

Open positions include director of fixed income—to be based in Albany—and chief risk officer, based in New York or Albany. Both roles report to Fuller and require 12 to 15 years of related experience.

Want the latest institutional investment industry
news and insights? Sign up for CIO newsletters.

To lead the pension plan’s fixed income investments, the fund seeks a candidate with “expert knowledge of all aspects” of the asset class and the ability to “negotiate effectively with managers and external parties to drive favorable terms.”

The director will oversee all fixed income investment and operations staff and work with fund leaders to determine investment policies and the plan’s strategic direction.

The chief risk officer will likewise contribute to investment policies and strategic direction, as well as oversee all investment and operations staff dedicated to risk. Applicants for the position should have “demonstrated skill in analyzing and recommending portfolios that meet specific risk and return objectives” and be able to “build consensus around specific risks.”

The fund is also seeking an investment officer and a senior investment officer in real assets, newly created positions that can be based in New York or Albany. Only 1.3% of the fund’s portfolio was invested in “opportunistic alternatives and real assets” as of December 31, 2015.

The senior investment officer will be responsible for selecting managers and developing a real assets portfolio. The investment officer will conduct due diligence on managers and monitor the portfolio’s performance.

Both positions report to the real assets director and informally oversee junior investment and operations staff.

Related: NYC, CalPERS on Hunt for Private Equity Talent

«