More than half of asset managers that are signed up to a UN responsible investment code are failing to integrate its guidance into their investment processes.
Many asset managers have scrambled to shore up their socially responsible investment credentials in recent years by signing the UN-backed Principles for Responsible Investment (PRI). However, a survey suggests that for some firms, this shift is more a matter of branding rhetoric rather than investment reality.
The study, conducted by business consultancy LCP, assessed the ethical standards of 100 investment managers. While every top-scoring manager was signed up to the PRI, just over 50% of PRI signatories were ranked as weak or fairly weak on ethics and were failing to integrate PRI guidance into their investment processes.
A spokesperson for LCP said the findings demonstrated the importance of looking beyond marketing material, headline commitments and membership of industry groups, and examining in-depth whether managers were genuinely dedicated to responsible investment.
LCP’s report is not the first to suggest many funds with ethical labels are not worthy of the name. Last July, fund ratings firm FE Trustnet found just 13 of the 218 funds in the UK Investment Association’s ‘ethical’ category met their stated socially responsible objectives.
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