RI forms a fundamental part of our manager selection process whereby we seek evidence that managers are incorporating ESG factors in their investment process.
In the initial evaluation (initial screening questionnaire) of prospective fund managers we include a range of threshold questions including whether a fund manager excludes controversial weapons from the investment universe and whether they're signatories to PRI or equivalent networks/codes. If they are not they need to explain why and demonstrate that they take a serious approach to RI if they are to progress further in the selection process. If they don't exclude controversial weapons we expect them to make the commitment to do so. Fund managers that progress to the next stage will be assessed on questions in the RFP in the following areas:
1)Team - who has responsibility for the RI decisions, we also ask and assess the diversity of team and whether they're a signatory to the women in finance charter
2) ESG integration in the asset class - how ESG factors are considered in the investment process for that strategy, we ask for examples of how it influenced security selection. We also ask about the data and proprietary systems used to identify ESG issues
3) Active ownership - we ask about the voting policy and process, and approach to engagement with examples. We ask for the ability to obtain voting intentions prior to AGMs so we can engage with fund managers about votes we may not align with
4) Reporting - We assess what and how fund managers report to clients on ESG and active ownership