All external investment managers (IMs) are reviewed and scored during the selection stage in relation to:
- Responsible Investment policy
- Integration and consideration of ESG factors - if not, how open is the process to inclusion of ESG considerations?
- Implementations - demonstration though examples of how ESG factors have impacted investment decisions
- People and Resources - dedicated to the research and integration of ESG risks and opportunities.
- Active ownership policy - including methods for integrating proxy voting practises.
- UN PRI signatory status
- ESG reporting
RFP documents include the following questions :
- Please describe how you integrate your consideration of ESG issues in your investment decision making.
- Please include information on ESG research and its role in the investment process.
- Do responsible investment practices form any part of investment managers' goals/incentives/remuneration? If yes, please provide brief details.
- Do you have any additional resources outside the investment team with specific ESG related responsibilities or incentives? If yes, please provide brief details.
- Do you identify and prioritise ESG issues and set engagement objectives for a particular company and, if so, how?
Investment Management Agreements include the following requirements on the IMs:
- Requirement for the IM to act consistently (best endeavours) with BTNZ RI policy
- Requirement for the IM to invest in accordance with the BTNZ's exclusion list
- Requirement to vote in a way consistent with BTNZ's proxy voting policy
- Reporting requirements covering ESG activities, engagement, voting activities etc.
IMs Monitoring process includes:
- Review of developments / amendments to IMs RI policy (if applicable)
- Examples of ESG research undertaken including new ESG risks and opportunities identified
- Examples of the application of ESG factors in the investment decision making process
- Examples of peer engagement and collaboration on RI matters
- Review of managers' voting activity
- Review of managers' engagement activities
- Review of PRI reporting