Frances Deakin
“You are underwriting the manager as much as you are underwriting what they are investing in on your behalf.” Frances Deakin, Local Pensions Partnership
Manuel: There is no shortcut to due diligence when it comes to any aspect of understanding what a manager is doing. What we typically look for is a clear message and consistency of application through- out the process.
Does the philosophy align with the policy? Does the policy align with the incentivisation of the managers? Does that align with the portfolio decisions that they are making? My rule of thumb is, if you want to know how good an organisation is at responsible investment, the last person you talk to is the head of responsible investment. If you want to know that it is embedded in the processes, you start with the portfolio at the end of the process and work your way back. Czupryna: In a way, ESG is like compliance or risk management in that it has to be embedded deeply within an organisation. It is not just an investment style tilted towards value or growth; it needs to pen- etrate every dimension of an organisation. Ramscar: When you assess a manager, you should be looking to see whether ESG is integrated into the mainstream teams in that business, rather than it being seen as the responsibility of a single team. Curtin: We are now asking managers a lot more about their diversity and inclusion. It is something that is a journey. We are not expecting everyone to have that equivalence immediately, but to think about how as an industry we can work towards improving those aspects.
November 2019 portfolio institutional roundtable: Responsible investing 15
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