We use a framework that we call ROSIE (research, objectives, strategy, implementation, evaluation). We integrate ESG into this framework as described below.
Research: survey key stakeholders, carry out training, and run workshops if necessary to determine Responsible Investment beliefs.
Objectives: translate RI beliefs into measurable, achievable objectives.
Strategy: incorporate RI beliefs & objectives (eg desire to allocate to sustainable assets or decarbonise) into the Strategic Asset Allocation model. Carried out where we know that a client has a stated objective.
Implementation: assess the approach of asset managers to managing ESG risks (in all asset classes). The Manager Research team's relative assessment of an asset manager's capability to manage ESG risks is a key selection factor when picking a Preferred Manager.
If a client has a stated ESG objective, where possible, we work with asset managers to include RI requirements in the contract between the asset owner and asset manager.
Evaluation: assess the ESG credentials of asset managers in our ongoing maintenance research and we utilise PRI ratings as a key discussion point. If clients have a stated ESG objective we are able to work with asset managers to find metrics against which the asset manager's performance can be evaluated.