April 2020 – This guide by The Investment Integration Project is intended to assist asset owners in assessing their managers’ effectiveness in addressing systemic social and environmental risks and rewards.
Systemic social and environmental challenges such as climate change, income inequality, access to fresh water, and gender diversity are, among others, an emerging feature of today’s investment landscape— and will likely continue to be so. Because the long-term sustainability of their investments depends in large part on the health and preservation of these systems, asset owners will need, and be expected, to contend with these and other interconnected, complex issues.
The guide recommends augmenting accounting facts and figures that evaluate managers’ credibility and financial sustainability with qualitative judgement. It outlines basic assumptions about the evaluation and assessment of social and environmental outcomes that are often overlooked by investors and proposes six dimensions for evaluating how well managers address systemic risks and rewards. It goes on to provide recommendations on how to evaluate the performance of asset managers against systemic social and environmental outcomes.