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NEI Investments

PRI reporting framework 2020

You are in Indirect – Manager Selection, Appointment and Monitoring » Appointment

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

specify

Requires reporting on ESG enagagements

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

          Jantzi Social Index
        

ESG Objectives

          All managers under the RS Funds umbrella are required to comply with the NEI Responsible Investment Policy
        
          NEI retains the right to impose investment restrictions on external managers. This includes screening companies with primary business activities in tobacco, gambling, adult entertainment, military weapons and nuclear material.
        
          NEI retains the rights to assess the ESG performance of investment process before initial purchase. After initial purchase the NEI ESG team monitors the company to ensure that it continues to meet our ESG expectations.
        
          NEI retains the right to engage directly with any of the portfolio companies. We assess the willingness and capacity to collaborate of potential managers in the selection and appointment process.
        
          NEI retains rights of all corporate actions and voting issues in accordance with NEI’s proxy voting guidelines.
        
          As a strategic initiative, all managers that are replaced must be done so by a manager that has a better ESG profile than the manager that is being replaced.
        
          Adherence to NEI RI policy.
        

Incentives and controls

Reporting requirements

Benchmark

          Multiple benchmarks used.
        

ESG Objectives

          All managers under the RS Funds umbrella are required to comply with the NEI Responsible Investment Policy
        
          NEI retains the right to impose investment restrictions on external managers. This includes screening companies with primary business activities in tobacco, gambling, adult entertainment, military weapons and nuclear material.
        
          NEI retains the rights to assess the ESG performance of investment process before initial purchase. After initial purchase the NEI ESG team monitors the company to ensure that it continues to meet our ESG expectations.
        
          NEI retains the right to engage directly with any of the portfolio companies. We assess the willingness and capacity to collaborate of potential managers in the selection and appointment process.
        
          NEI retains rights of all corporate actions and voting issues in accordance with NEI’s proxy voting guidelines.
        
          As a strategic initiative, all managers that are replaced must be done so by a manager that has a better ESG profile than the manager that is being replaced.
        
          Adherence to NEI RI policy.
        

Incentives and controls

Reporting requirements

Benchmark

          Multiple benchmarks used.
        

ESG Objectives

          All managers under the RS Funds umbrella are required to comply with the NEI Responsible Investment Policy
        
          NEI retains the right to impose investment restrictions on external managers. This includes screening companies with primary business activities in tobacco, gambling, adult entertainment, military weapons and nuclear material.
        
          NEI retains the rights to assess the ESG performance of investment process before initial purchase. After initial purchase the NEI ESG team monitors the company to ensure that it continues to meet our ESG expectations.
        
          NEI retains the right to engage directly with any of the portfolio companies. We assess the willingness and capacity to collaborate of potential managers in the selection and appointment process.
        
          NEI retains rights of all corporate actions and voting issues in accordance with NEI’s proxy voting guidelines.
        
          As a strategic initiative, all managers that are replaced must be done so by a manager that has a better ESG profile than the manager that is being replaced.
        
          Adherence to NEI RI policy.
        

Incentives and controls

Reporting requirements

Benchmark

          Multiple benchmarks used.
        

ESG Objectives

          All managers under the RS Funds umbrella are required to comply with the NEI Responsible Investment Policy
        
          NEI retains the right to impose investment restrictions on external managers. This includes screening companies with primary business activities in tobacco, gambling, adult entertainment, military weapons and nuclear material.
        
          NEI retains the rights to assess the ESG performance of investment process before initial purchase. After initial purchase the NEI ESG team monitors the company to ensure that it continues to meet our ESG expectations.
        
          NEI retains the right to engage directly with any of the portfolio companies. We assess the willingness and capacity to collaborate of potential managers in the selection and appointment process.
        
          NEI retains rights of all corporate actions and voting issues in accordance with NEI’s proxy voting guidelines.
        
          As a strategic initiative, all managers that are replaced must be done so by a manager that has a better ESG profile than the manager that is being replaced.
        
          Adherence to NEI RI policy.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

04.4. Provide additional information relevant to your organisation`s appointment processes of external managers. [OPTIONAL]

          As per the Investment Policy Statements, some managers are contractually obligated to adhere to the NEI Responsible Investment Policy. In addition, all manager contracts also state that NEI retains the right to vote all proxies in house and conduct independent or joint engagements with companies in the NEI mandates. If a manager does not comply with the above, the first step is to reach out to the manager to given them a chance to review their actions, as a last resort of non-compliance, the manager may be terminated. Non-compliance is considered a breach of contract and therefore can lead to termination of the relationship. 
In addition to the manager’s ESG integration, NEI conducts an ESG evaluation of each holding in its portfolios. We recognize that each investment manager has a set of beliefs on responsible investing and varying levels of tolerance on those beliefs. As a result of our secondary ESG evaluation, we may require that a company is excluded from the NEI segregated mandates. As such, in the appointment of managers, we review the manager’s ability and skill in incorporating NEI’s ESG screens and ESG exclusions. As a result, we review and/or work with potential managers to build a process whereby our internal ESG team can collaborate with equity analysts and portfolio managers on ESG risks to create a suitable list of excluded securities.
        

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