It can take relatively little effort for investment managers to give the appearance of being concerned about responsible investment issues. But it takes more than glossy marketing material, membership of an industry group or simple rhetoric to be a truly responsible investment manager.
To my mind, real commitment to responsible investment means backing up your stated beliefs with action and resources, and having a long-term focus. As a fund manager, there are a number of ways we can demonstrate this commitment, such as:
- integrating environmental, social and governance (ESG) considerations into our investment analysis and decision-making processes
- exercising our voting rights
- engaging with companies to improve their ESG policies and practices, and
- working collaboratively with other investors.
At AMP Capital we have also reinforced our commitment by signing up to the internationally-recognised Principles for Responsible Investment (PRI). These Principles were devised by the investment community and are in essence a set of global best-practices for responsible investment.
Being a PRI signatory is one way we ‘walk the talk’ and show our support for responsible investment.The PRI is based on the premise that institutional investors have a duty to act in the best long-term interests of investors and therefore need to give appropriate consideration to ESG issues. By providing a framework for the integration of responsible business conduct into investment strategies, it contributes to promotion of ESG objectives within the financial sector. In turn, by implementing the Principles signatories contribute to the development of a more sustainable global financial system.
Adopting the Principles also provides an externally-recognised benchmark against which we monitor our progress towards achieving the integration of material ESG issues into our investment decision-making. Signatories are required to report on their responsible investment activities annually and are assessed against a range of indicators. This provides regular feedback on our performance and a way of measuring progress against an industry standard.
AMP Capital’s PRI 2017 assessment report shows we continue to score highly across the various assessment modules and are ahead of the median results of our peers. For further details view a copy of the summary report.
We are proud to endorse the PRI initiative, which recognises that environmental, social and governance issues can be material to the financial outlook of a company and affect the long-term performance of investment portfolios. We believe that the implementation of the Principles will result in better quality investment outcomes for our clients, and closer alignment between our own objectives and those of society at large.
For further information on AMP Capital’s responsible investment philosophy and range of responsible investment funds, please visit the responsible investment section of our site.
This blog post has been prepared to provide general information and does not constitute financial advice in accordance with the Financial Markets Conduct Act 2013. An individual investor should, before making any investment decisions, consider the information available in the relevant Product Disclosure Statement and seek professional advice. While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) Limited and the AMP Group (together, 'AMP') make no guarantee that the information supplied is accurate, complete or timely and do not make any warranties or representations in respect of results gained from its use. The information is not intended to infer that current or past returns are indicative of future returns. The views expressed are those of the author and do not necessarily reflect those of AMP. These views are subject to change depending on market conditions and other factors.