June 20, 2022
ESG Identity is becoming the central factor in assessing a manager’s sustainability. This is evidenced by research developed over the past two years by ET.Group’s Research Office among financial advisors (whose retail clients are increasingly asking about the sustainable identity of the Asset Managers) and among institutional investors (with pension funds driven by ESG Identity in entrusting an Asset Manager with a mandate). And this is confirmed by questionnaire updates from two leading institutions for responsible finance. UNPRI updated its tools for Asset Owners from March to the present by introducing verification of aspects of governance, manager commitment and transparency. Similarly, last week, the International Corporate Governance Network (ICGN) released an updated version of its “Model Mandate,” or guidelines for choosing an Asset Manager aligned with the Asset Owner’s objectives, incorporating a long list of questions on the governance models by which the Asset Manager can ensure ESG results.
It is in this context that, in the coming days, a frontier, international initiative developed as part of the salone.SRI 2022 will be presented. The initiative, called the ESG Identity Asset Manager Assessment (ESG.IAMA), consists of a survey that will involve all major Asset Managers committed to responsible investment. The survey consists of a hundred questions, all closed-ended, that will investigate ESG Identity on different levels: corporate; management; investment process; offering; and compliance. Each response will have a predetermined score. Thus, the survey will produce a quantitative result that will indicate the degree of ESG Identity of the subject.
The scientific foundations of the research are, in addition to the aforementioned institutional references (UNPRI and ICGN), the normative indications of Shareholder Rights, SFDR and Taxonomy, the benchmarking analysis on the best Asset Managers developed in the last three years for the SRI Awards, as well as a desk analysis developed ad hoc on the major international groups.
Above all, a unique know-how, internal to ET.Group, was used on the corporate front: that of seven years of development of Integrated Governance Index (IGI), the first project to assess the degree of integration of ESG in corporate governance. In seven years it has become a bechmark capable of covering 62 percent of the companies in the FTSE MIB.