Responsible investment efforts show 'striking variation'

Responsible investment efforts show 'striking variation'

A report assessing the responsible investment performance and transparency of Europe’s largest fund houses has singled out Schroders and Aviva Investors for praise but warned of a “striking variation” between the best and worst firms.

Of the 40-strong cohort of firms analysed by ShareAction, the campaign group, half had a presence in the UK. Schroders came top with a score of 82 out of 90, followed by Aviva Investors on 80 and Standard Life Investments on 76.5.

However, the disparity between the top-listed names and others with a UK presence was stark. Goldman Sachs Asset Management International had a score of just 19, Pioneer of 29, while JPMorgan Asset Management scored 42.

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ShareAction noted that while all of the firms listed claimed a “commitment to responsible investment” and participated in relevant industry forums, this was not always reflected in broader practice.

“Despite this public commitment, the actual quality of responsible investment performance and disclosure varies widely among these major asset managers,” said authors Nandi de Haas and Therese Kieve.

“We found that the quality demonstrated does not depend on the size of the firm, the region, ownership structure or whether they are predominantly active or passive managers.

“Clients should be aware that even though firms are Principles for Responsible Investment signatories, and complete the reporting framework, this does not remove the need to assess what lies beneath the surface.”

The ShareAction paper, “Lifting the Lid: Responsible investment performance of European asset managers”, assessed some of the region’s largest fund groups on their transparency, on topics ranging from the accessibility of information on company voting and engagement to conflict of interest policies and investment fee disclosure.

Firms’ adherence to disclosure obligations varied, the report suggested. Of the managers surveyed, 57.5 per cent disclosed the total number of company engagements undertaken over a year, 45 per cent broke these down by environmental, social and governance (ESG) issues and 47.5 per cent revealed the topics and results of these activities.

Only eight managers provided a full list of the companies they engaged with over the year.

For firms in the UK, the results come at a time of heightened scrutiny of fees and transparency. In recent weeks some asset managers have been defending their practices against claims, made in the FCA’s market study interim findings, of “limited price competition” between actively managed portfolios. The regulator has since suggested ways of “shining a light” on high costs and poor performance.

In this context, ShareAction suggested, asset managers would be wise to live up to their public proclamations in areas such as responsible investment.

“The influential asset managers in this study should grasp the opportunity to demonstrate that they add value for clients by matching their responsible investment performance to their public statement,” the authors said. 

How asset managers with a UK presence fared
Asset ManagerRank (out of 40)Score (out of 90)
Aviva Investors380
Standard Life Investments576.5
Columbia Threadneedle773.5
Natixis Gam972.5
Axa Investment Managers1071.5
M&G Investments1168.5
State Street Global Advisors1364.5
Aberdeen Asset Management1860
Allianz Global Investors2157
HSBC Gam2254.5
Pictet Asset Management2646.5
Pioneer Investments3029
Source: ShareAction