CAMRADATA reviews asset managers' ESG capabilities for investors
CAMRADATA has launched a new tool allowing investors compare asset managers’ environmental, social, and governance (ESG) capabilities on a like-for-like basis on its research platform CAMRADATA Live, in order to meet growing investor demand for insight into asset managers’ ESG credentials.
Sean Thompson, managing director, CAMRADATA, says: “The understanding and integration of ESG criteria within investment mandates has developed greatly in recent years. ESG is no longer a nice to have it is fast becoming a must have for investors.”
“This growing interest is clearly demonstrated by the number of asset managers signing up to the United Nations’ Principles for Responsible Investment, the proliferation of ESG research providers, and the fact investors are increasingly seeing ESG not just as a risk management tool, but as a potential to generate attractive returns.”
According to research by Charles Stanley Direct earlier this year, almost half of UK investors (48 per cent) expect to boost their socially responsible investments over the next three years.
Thompson says: “Investors now demand and expect their third-party asset managers to demonstrate not only a deep level of ESG analysis, but show how ESG is integrated within wider investment processes – and how transparently they can demonstrate the benefits of it.”
“The failure to do this could result in firms being accused of ‘greenwashing’. To help our investors, we undertook an exercise to deliver an ESG report that provides comparable information enabling investors to apply more scrutiny to the ESG capabilities of asset managers on our database.”
To develop this new feature, CAMRADATA released a new set of ESG questions within CAMRADATA Live that sought greater clarity from asset managers about the various ways they treat ESG and integrate it within their business.
This information forms the basis for ESG reports that investors can run on every asset manager within CAMRADATA Live. The reports are broken down into four sections: investment policy and firm structure; investment process; active ownership; and reporting. Each section allows comparisons between asset managers.