For RIAA, such guidelines and policies are embedded across our work program in many ways which are then used to inform our members (client) on their own implementation methods.
For example, our industry benchmarking research articulates guidelines as best practice guidance across superannuation funds, impact investors, ESG integration and ethical investment.
Furthermore, such guidelines and policies are embedded in RIAA's investment fund Certification Program where we articulate such policies and guidelines to applicants across different sectors. One such example is set out below:
Responsible Investment Certification Program
#11 Program Expectations for ESG Integration
The last decade has seen Responsible Investment emerge from being a niche industry to a point today where a significant proportion of the investment industry has committed to implementing a responsible investment approach. For large institutional investors, this has focused primarily on applying ESG integration practices to traditional financial analysis.
Defining and measuring ESG integration practices is challenging due to limited disclosure and a broad variation in depth of integration - from systematic implementation embedded into investment valuation practices and company engagement, to more ad hoc approaches.
For the purposes of providing guidance to certified members consistent with trending industry behaviours and heightening consumer expectations, RIAA has identified key aspects of ESG integration. We expect that this will change over time as our members try and test this in practice; and we intend to watch and learn and to update these, as leading practice evolves.
Currently certified funds who claim ESG integration as one of their RI strategies as part of their application for entry to the RIAA RI Certification Program show compliance with or reasonable progress towards the following expectations outlined in Table 1.
The Performance Expectations table sets out the methodology to assessing the level of ESG integration adopted by investment managers. It is based on 7 pillars that constitute elements of leading practice for the integration of ESG. These pillars have been established based on reviews of organisations in the responsible investment field who are working on defining what is leading practice in RI (including SIFs, GSIA, PRI, asset consultants and others).
The Performance Expectations table uses these pillars to establish a scoring process whereby those who score a sufficiently high rating are included as demonstrating leading practice in ESG integration (scoring a minimum of 82% or 11.5 points out of 14). This ensures a scoring system that is not prescriptive in what investors must have in place for demonstrating good ESG integration, but rather allows each organisation to implement a variety of measures that meets their organisation's needs and style.