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Ethics Metrics LLC

Service Providers Framework 2019

You are in Investment Consultancy » Manager selection and monitoring

Manager selection and monitoring

IC 12. ESG in manager selection, appointment and monitoring

12.1. Indicate whether you incorporate ESG factors into your manager selection and monitoring services.

Manager selection service

Manager monitoring service

12.3. Additional information. [OPTIONAL]

Ethics Metrics monitors over 1,100 global Registered Investment Advisers (RIAs) with the U.S. Securities and Exchange Commission and their equity investments in the 100 large DIHCs. As of 12/31/17, 1,165 RIAs own $1.6 trillion or 76% of the $2.1 trillion in consolidated market value for the 100 large DIHCs.. A subset of this group, includes 283 PRI Signatories, from 19 countries, that own $1.3 trillion or 62% of the consolidated market value of the 100 large DIHCs. Total equity investments under management for the 283 Signatories equals $19 trillion and this represents 27% of the $70 trillion of total assets under management by all PRI Signatories. For additional information, please visit http://www.equitycontagionrisk.com


SELECTION

IC 13. Manager selection activities

13.1. Indicate what activities you undertake during the process of selecting a manager.

Research and screening

Strategy

ESG people/oversight

Process/portfolio construction

Selection process and reviewing documentation

          Process evaluates publicly available information.
        

13.2. Indicate whether you use any of the following scores or targets in your manager selection process.

13.3. Additional information. [OPTIONAL]


IC 14. Incorporating asset owners’ investment principles in selection of manager

14.1. Describe how you incorporate asset owners' investment principles into the manager selection process.

          The process is an independent, quarterly analysis of DIHC equity investments by asset owners and investment managers to undisclosed governance risks by each of 100 large DIHCs as measured and rated by the Ethics Metrics Credit Rating scale of 1 to 9. See previous comments on Level 1 and Level 2 issues.
        

14.2. Additional information. [OPTIONAL]


IC 15. ESG in selection due diligence

15.1. Briefly describe how you include ESG factors in your due diligence process for manager selection.

          The process is an independent, quarterly analysis of DIHC equity investments by asset owners and investment managers to undisclosed governance risks by each of 100 large DIHCs as measured and rated by the Ethics Metrics Credit Rating scale of 1 to 9. See previous comments on Level 1 and Level 2 issues.
        

15.2. Additional information. [OPTIONAL]


IC 16. Monitoring investment managers on ESG

16.1. Indicate whether you set any of the following to measure compliance/progress, or use the following information to review and evaluate the investment manager.

Setting measures for the investment manager as part of the monitoring process

Reviewing and evaluating information from the investment manager as part of the monitoring process

16.2. Describe how you raise and manage concerns when monitoring investment managers on ESG factors.

          The process is a mathematical uniform system that evaluates all asset owners and investment managers on a common basis using public information.
        

16.3. Additional information. [OPTIONAL]


IC 17. Reporting back to asset owners

17.1. Indicate whether you report back to asset owners on your manager selection and/or monitoring activities.

17.2. If yes, describe how you report back and the frequency.

          Quarterly, as requested.
        

17.4. Additional information. [OPTIONAL]


IC 18. Demonstrating value on manager selection, appointment and monitoring

18.1. Describe how you measure, track or otherwise demonstrate your value on manager selection and monitoring services.

          As a starting point, the inefficient DIHC equity markets mislead all asset owners and investment managers.  The Ethics Metrics' research and DIHC Rating Reports bring transparency to information asymmetries and superior information that masks dangers of default and potential defaults and systemic risks within each of 1,165 RIAs that own $1.6 trillion of the total consolidated equity of $2.1 trillion as of 12/31/17. A subgroup of 283 PRI Signatories from 19 countries own $1.3 trillion or 62% of the $2.1 trillion equity. These PRI Signatories have a total of $19 trillion of equity investments under management, or 27% of the $70 trillion of total assets under management for all Signatories.
        

18.2. Additional information. [OPTIONAL]


IC 19. ESG in manager selection, appointment and monitoring (Private)


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