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How responsible investing fits into our manager research process

October 29, 2020
clock 4 MIN READ

Our commitment to helping our clients meet their responsible investing objectives and social goals is reflected in our status as a UN-PRI signatory. This includes applying either our own or our clients’ ESG evaluation criteria when vetting managers and holdings to identify those dedicated to:

  • Investments with strong ESG rankings
  • Sustainability measures, such as green business, climate change and supporting minorities in the workplace
  • Investment opportunities that benefit social causes or communities, such as community development, low-income housing and faith-based groups

Incorporating ESG into the manager research process

Our rigorous manager research process includes a proprietary ESG ranking system, which forms the basis of our decision to hire a manager that fits our clients’ ESG needs. We consider 3 broad sets of factors in our evaluation:

  1. Profile: We analyse the extent of the manager’s sustainability practices in a broad sense, as well as their commitment to responsible investing
  2. Resources: We evaluate how well-resourced the manager is to achieve its responsible investing goals (the bridge between words and action)
  3. Practices: We assess how the manager actually implements responsible investing in its investment process. This is designed to distinguish responsible investing from “greenwashing,” or presenting false integration of responsible investing practices to attract clients

More specifically, each manager receives multiple scores based on their involvement in promoting sustainable investing, based on the following criteria:

  • How the manager handles ESG-related risk and ensures compliance with its ESG policy
  • Overall experience with regard to managing ESG-integrated portfolios
  • Level of ESG personnel
  • Whether the manager generates its ESG-related research internally or relies solely on third-party data providers
  • How the manager incorporates ESG at the fundamental analysis level
  • Whether the manager engages with companies and management on sustainability
  • Whether the manager makes ESG-related reporting available to clients 
  • How much ESG factors influence investment decisions
  • What plans, if any, the manager has to enhance its ESG efforts over the next three to five years

Find out more about our manager research process and manager research services.

More about UN-PRI

The United Nations-supported Principles for Responsible Investment (PRI) is a growing initiative consisting of international investors that work together on ESG issues, such as human-rights campaigns, environmental concerns, employee diversity and anti-corruption efforts.
As a signatory for The Principles for Responsible Investment, SEI has publicly committed to follow six voluntary guiding principles meant to help incorporate ESG risks into portfolio management and corporate practice. These Principles include:

  • Incorporating ESG issues into investment analysis and decision-making processes
  • Integrating ESG issues into ownership policies and practices
  • Seeking appropriate disclosure on ESG issues by the entities in which firms invest
  • Promoting acceptance and implementation of the Principles within the investment industry
  • Working together to enhance effectiveness in applying the Principles
  • Reporting on activities and progress towards implementing the Principles

Important Information: 

This content is for professional client use only and is not for further distribution.

This material is not directed to any persons where (by reason of that person’s nationality, residence or otherwise) the publication or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not rely on this information in any respect whatsoever. Investment in the funds or products that are described herein are available only to intended recipients and this communication must not be relied upon or acted upon by anyone who is not an intended recipient. While considerable care has been taken to ensure the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information. Past performance is not a reliable indicator of future results. Investments in SEI Funds are generally medium to long-term investments. The value of an investment and any income from it can go down as well as up. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events. Any reference in this document to any SEI funds should not be construed as a recommendation to buy or sell these securities or to engage in any related investment management services. Recipients of this information who intend to apply for shares in any SEI fund are reminded that any such application must be made solely on the basis of the information contained in the Prospectus (which includes a schedule of fees and charges and maximum commission available). Additionally, this investment may not be suitable for everyone. If you should have any doubt whether it is suitable for you, you should obtain expert advice. The views and opinions in this content are of SEI only and are subject to change. These views and opinions should not be construed as investment advice.
This document is issued by SEI Investments (Europe) Limited (SIEL), 1st Floor, Alphabeta, 14-18 Finsbury Square, London EC2A 1BR. SIEL is authorised and regulated by the Financial Conduct Authority. This document and its contents are directly only at persons who have been categorised by SIEL as a Professional Client for the purposes of the FCA Conduct of Business Sourcebook.
 

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