External investment manager selection, appointment, initial and ongoing due diligence and engagement with investment managers is made cognisant of managers consideration of ESG risks (and opportunities) in security selection and portfolio construction, including their active ownership/stewardship approaches. Written guidelines for investment manager due diligence and implementation and an ESG policy for investments outline the overall requirements. As a supplement, we also use investment consultants and ESG research providers as independent resources where relevant in supporting these activities. Appointment of investment managers is made considerate of their ESG credentials as relevant to the asset class, the form of the investment (segregated mandate or comingled vehicle) and investor rights.
ESG due diligence includes an assessment of:
• Current, planned or possible integration of ESG considerations in security selection portfolio construction/risk management
• ESG and carbon footprint related portfolio objectives, targets, overlays and/or restrictions that may be employed
• Capabilities for reporting and benchmarking strategies for ESG factors/risks and climate footprint
• ESG research agenda and the use of ESG research providers
• Active ownership, stewardship and proxy voting activities/policies and examples of regular reporting available to clients
• ESG policy framework, outlining responsibility for investment management of ESG issues and oversight
• Participation in ESG related organisations (PRI etc.).
Our approach recognises that collaboration with others in the investment industry may increase the extent to which our ESG program can benefit. We are therefore an active participant in collaborations that can help us to further integrate ESG into our investment processes.
IAG reviews polices and processes related to responsible investment and investment manager selection and appointment on an annual basis.