When selecting managers we consider a number of aspects such as organisation, people, process, risk, performance and fees. We explicitly score ESG factors in the organisation and process sections. Implicitly, ESG factors also play a role in the other aspects such as governance aspects concerning remuneration. To specifically understand what a manager is doing in the area of ESG our RFPs contain questions regarding the way ESG is integrated within the organisation (e.g. resources and reporting) and investment process. Besides our own findings, we also look at the managers PRI self-assessment and where available at consultant ESG evaluations. In the investment guideline we agree with the managers that we seek to document the ESG processes we have seen, and thus also agree ESG reporting in the SLA with the manager.
In monitoring the managers we look at the same aspects as when we selected them supplemented with ESG specific information on policies, ESG initiatives and codes, screening and exclusions, voting and engagement, ESG integration, impact investing and climate risks and opportunities. During our annual monitoring reviews, with regard to ESG, we will check for concrete examples where ESG aspects were assessed and how these influenced decisions. We discuss with the managers how they interacted with companies on ESG topics in an attempt to improve their ESG performance.