5. Investment process
Include qualitative aspects of an integrated ESG process, such as engagement. Fund managers that have an integrated ESG process are engaging with the management teams of their companies to improve their ESG processes over time. This should be reflected in the overall scoring.
It is useful to reflect on the lessons learned from the advent of individual stock ratings. These were viewed as a good idea at the time but went through a series of adjustments post-launch following feedback from both the users of the ratings and those being rated.
The UK Sustainable Investment Forum is currently consulting with interested parties to provide a coordinated response and suggestions for improvement to the ratings organisations. Feedback should help improve these important first steps on the way to achieving a more representative ratings system that benefits fund selectors and their clients.
Lisa Beauvilain is head of sustainability and ESG at Impax Asset Management
