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INDEPENDENT RESEARCH IN RESPONSIBLE INVESTMENT SURVEY 2012 (IRRI 2012)
JULY 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IRRI Survey 2012 1
CONTENTS
EXECUTIVE SUMMARY 3
KEY FINDINGS 4
THE ROLE OF INDEPENDENT SRI & CG RESEARCH IN INTEGRATED ANALYSIS 4
QUESTIONS ASKED 6
CORPORATE GOVERNANCE RESEARCH – ORGANISATION 7
CORPORATE GOVERNANCE RESEARCH - INDIVIDUAL 8
SUSTAINABLE & RESPONSIBLE INVESTMENT RESEARCH - ORGANISATION 9
SUSTAINABLE & RESPONSIBLE INVESTMENT RESEARCH - INDIVIDUAL 11
SALES/CLIENT RELATIONS (SRI & CG) 13
RESEARCH & INNOVATION – DELIVERED IN 2011/2012 15
RESEARCH & INNOVATION – FRUSTRATIONS 17
RESEARCH & INNOVATION – WANTED FOR 2012/2013 19
ASSET MANAGERS – BEST USERS OF SRI/CG RESEARCH 23
ASSET MANAGERS – BEST COMMUNICATIONS OF SRI/CG NEEDS 24
ASSET MANAGERS – IMPROVING COMMUNICATIONS 25
QUOTED COMPANIES – BEST COMMUNICATORS 27
QUOTED COMPANIES – IMPROVEMENTS 29
EXTEL 32
SRI-CONNECT 33
IRRI Survey 2012 2
EXECUTIVE SUMMARY
The first Independent Research in Responsible Investment survey (IRRI 2012) was conducted in June 2012 by Thomson Reuters Extel in partnership with www.sri-connect.com
Sustainable & Responsible Investment (SRI) and its sister discipline, Corporate Governance (CG), have proved resilient through the unfolding chapters of the recent credit crisis and economic downturn. Far from being seen as a luxury for good times, they are coming to be seen as an antidote to the foibles and failings of ‘mainstream’ finance.
Independent research provision has always been a cornerstone of SRI & CG practice and will, no doubt, remain so. Furthermore, as the relevant of these disciplines to mainstream asset allocation, sector weighting and stock selection becomes ever clearer, it is timely to introduce a market-orientated process to identify innovative and client-responsive practice in this area.
The IRRI survey invited responses from all participants in the SRI value chain: asset managers, sell-side research houses and independent SRI agencies. It received 239 votes from 139 different firms in 17 different countries. These votes were robustly and independently scrutinised to ensure data quality and integrity.
The IRRI survey celebrates and rewards high-performing analysts with recognition and career opportunity. We also hope that it will enable managers at research providers to identify strengths and weaknesses in their firm’s analytical capabilities and to benchmark those against peers. Most importantly, we hope that IRRI will add a further incentive for high-quality, client-responsive research and service.
We would like to thank formally all participants for their contributions to the Survey. We look forward to working with you all again in future to support continued transparency, quality and integrity in this part of the investment value chain.
IRRI Survey 2012 3
KEY FINDINGS
THE ROLE OF INDEPENDENT SRI & CG RESEARCH IN INTEGRATED ANALYSIS
By Mike Tyrrell, Editor of SRI-CONNECT
It has been a fascinating and hugely encouraging privilege to review the results of IRRI 2012 and to try to contextualise the role that independent SRI & CG research can (indeed must) play in the all-important task of integrating sustainability analysis with mainstream asset allocation, sector weighting and stock selection decisions.
Policy, initiatives and regulation may all be needed to support the transition towards capital markets that are better governed, more economically-supportive, more environmentally-benign and more socially-just. But ultimately, capital moves when smart people challenge consensus thinking with creative, robustly-analysed and well-communicated research. Integration is achieved on an analyst-by-analyst; research idea-by-research idea basis.
At a macro level, the whole of SRI is one such challenge to the consensus thinking in financial markets over fifty years. However, this broad challenge now needs to be translated into hundreds of more targeted and specific challenges. (Indeed, many analysts refer, in the votes, to the importance of sector-specific, in-depth financially-integrated research calls.)
It is easy to swallow the SRI ‘Kool Aid’ that policy, initiatives and regulation are the answer. It is equally easy to assume that ‘sell-side’ analysts hold the keys to ‘integration’ and ‘mainstreaming’. They are, indeed, an absolutely critical part of this process. However, as we see from the responses to IRRI, the independent research sector also has an important role to play in driving SRI & corporate governance considerations into the heart of investment decision-making.
This ‘race to the middle’ to produce the ‘stimulus research’ that is so important to the integration process presents an excellent opportunity for independent research providers that:
• Put individual analysts & their creative thinking at the forefront of their product proposition
• Are prepared to innovate and develop business models that are more suited to high-value-added research (and operate effectively alongside their core subscription-based model)
• Put clients before products – by maintaining excellent levels of service and responsiveness to client demands
Releasing the wealth of talent and enthusiasm within independent research providers was one of the inspirational forces behind the development of SRI-CONNECT and we are committed to channelling this energy to market.
We support IRRI because we believe that an open, transparent, market-orientated approach is needed to chart the progress of independents and to reward innovation and development.
For markets to work, they need active participation and the free flow of money and information. We thank all of those who are participating in these exciting research markets; we thank those that ensure their money moves to support their words and, today particularly, we thank those who completed the IRRI 2012 survey. The information that you have provided moves our understanding of this area on. You have signed up to be part of this exciting development change and we thank you sincerely for that.
IRRI Survey 2012 4
It is clear that there is no single silver bullet to integrating sustainability and corporate governance factors within mainstream investment decision-making. But the target can equally be brought down by a hail of lead bullets. IRRI 2012 shows that we now have the ammunition. Now take aim…
IRRI Survey 2012 5
QUESTIONS ASKED
IRRI 2012 asked for responses to the following questions:
CORPORATE GOVERNANCE
• Best independent corporate governance research provider (organisation)
• Best individual analyst for corporate governance research
SRI
• Best independent SRI research provider (organisation):
• Best individual analyst for SRI research
SALES / CLIENT RELATIONS
• Best client relations / salesperson for SRI & corporate governance research
RESEARCH, INNOVATION & DEVELOPMENT
• Most innovative product / research piece produced in 2011/12
• Most frustrating practice by SRI / corporate governance research organisations
• What development would you most like to see in SRI / corporate governance research in 2012?
ASSET MANAGERS
• Which asset managers make best use of SRI / Corporate Governance research in your opinion?
• Which asset manager is best at communicating its research needs to SRI research providers?
• What could asset managers do to inform SRI / corporate governance research providers better about their specific research needs?
COMPANIES
• Which (quoted) company is best at communicating its sustainability & corporate governance performance to you?
• What could companies do to improve their communications to you on sustainability & corporate governance matters?
IRRI Survey 2012 6
CORPORATE GOVERNANCE RESEARCH - ORGANISATION
BEST INDEPENDENT CORPORATE GOVERNANCE RESEARCH PROVIDER (ORGANISATION)
Named research providers
The following research providers were also named by voters in this category:
ASSET4 (Thomson Reuters), Association of British Insurers, Center for Political Accountability, Corporate Governance Europe, Governance for Owners, Groupe Investissement Responsable, Hermes Equity Ownership Services, IW Financial, Ownership Matters, RepRisk AG, Sustainable Investments Institute (Si2), The Corporate Library, Trustfinance, World Governance Indicators
Pos. Firm Percentage1 GMI 24.22 ISS 12.13 Sustainalytics 10.64 Proxinvest 7.15 MSCI ESG Research 6.06 PIRC 4.47 EIRIS 3.88 Glass Lewis 2.98 Manifest 2.910 Ethos 2.311 Boardex 2.112 EthiFinance 1.912 SolarOn 1.914 Oekom Research 1.715 Bloomberg 1.315 CAER 1.315 Inrate 1.315 PHITRUST 1.315 Vigeo 1.320 Asian Corporate Governance Association 1.020 ECGS 1.0
IRRI Survey 2012 7
CORPORATE GOVERNANCE RESEARCH - INDIVIDUAL
BEST INDIVIDUAL ANALYST FOR CORPORATE GOVERNANCE RESEARCH
Named analysts
The following analysts were also named by voters in this category:
Andrew Ninian (Association of British Insurers); Barbara Evans (Bloomberg); Martin Lawrence (Ownership Matters); Olivia Rapp (Proxinvest); Rafal Budzinski (PIRC); Ric Marshall (GMI Ratings); Robbert Gerritsen (MSCI ESG Research); Thomas von Oehsen (ISS (Institutional Shareholder Services)); Vipul Arora (Solaron); Bruce Freed (Center for Political Accountability); Charles Lee (Asian Corporate Governance Association); Hunter Page (Regnan); Kristof Ho Tiu (Deminor); Marie-Pier Lamarre (Groupe
Investissement Responsable); Sandrine Lalmant (PIRC);
Pos. Analyst Percentage1 Laurence Loubieres, Sustainalytics 9.92 Kimberly Gladman, GMI Ratings 7.43 Dayna Linley, Sustainalytics 6.64 Kazutaka Kuroda, EIRIS 5.05 Pierre-Henri Leroy, Proxinvest 4.16 Abel Page, EthiFinance 2.56 Alan Brett, Manifest 2.56 Alberto Bagnara, ISS (Institutional Shareholder Services) 2.56 Eugenia Fabon Victorino, Sustainalytics 2.56 Georgina Marshall, ISS (Institutional Shareholder Services) 2.56 Hans-Christoph Hirt, Hermes Equity Ownership Services 2.56 Helena Hernando, Sustainalytics 2.56 Irene Sosa, Sustainalytics 2.56 Jean Laville, Jean Laville 2.56 Julia Leske, Corporate Analysis: Enhanced Responsibility (CAER) 2.56 Linda Scott, Governance for Owners 2.56 Loic Dessaint, Proxinvest 2.56 Lucy Marcus, Marcus Ventures 2.56 Paul Hewitt, Manifest 2.56 Paul Hodgson, GMI Ratings 2.56 Sarah Wilson, Manifest 2.56 Stephane Genilloud, Inrate 2.56 Tessa Younger, PIRC 2.56 Yola Biedermann, Ethos Services 2.5
IRRI Survey 2012 8
SUSTAINABLE AND RESPONSIBLE INVESTMENT RESEARCH - ORGANISATION
BEST INDEPENDENT SRI RESEARCH PROVIDER (ORGANISATION) SELECTIONS
Pos. Firm Percentage1 Sustainalytics 32.02 MSCI ESG Research 13.23 EIRIS 9.94 Vigeo 4.85 GMI 4.06 Oekom Research 3.77 EthiFinance 3.28 Inrate 2.69 SolarOn 2.210 Asset4 1.810 RepRisk 1.812 Trucost 1.713 Bloomberg 1.114 Maplecroft 1.015 CAER 0.916 Good Bankers 0.716 SAM Research 0.716 SIRIS 0.719 imug 0.619 PIRC 0.619 Regnan 0.622 CDP 0.522 SynTao 0.524 Carbon Tracker 0.424 Environmental Leader 0.424 Ethibel 0.424 Ethical Screening 0.424 ETHIX 0.424 Fair Pensions 0.424 Global Witness 0.424 IRRC 0.424 ISS 0.424 Proxinvest 0.424 Stephens 0.424 Sustensis 0.424 Thomson Reuters 0.424 Transparency International 0.424 WWF 0.4
IRRI Survey 2012 9
Named research providers
The following research providers were also named by voters in this category:
Access to Medicines Index Foundation, Acclimatise, Alcyone, ASN Research Netherlands, Bank Sarasin, Boardex, Ceres, Earth Security Initiative, Ecodes, Ethos, Feri, FTSE, GES Invest, Glass Lewis, Green Eye, Greenpeace, Hermes Equity Ownership Services, ICCR, IW Financial, Needham, Novethic, OFG Recherche, Platform, Proxy Impact, Suedwind e.V., Sustainable Investments Institute (Si2), Triodos Bank, Washington Analysis, World Governance Indicators, World Resources Institute, Worldwise Investor
IRRI Survey 2012 10
SUSTAINABLE AND RESPONSIBLE INVESTMENT RESEARCH - INDIVIDUAL
BEST INDIVIDUAL ANALYST FOR SRI RESEARCH
Pos. Analyst Percentage1 Dayna Linley, Sustainalytics 23.92 Irene Sosa, Sustainalytics 11.23 Laurence Loubieres, Sustainalytics 11.24 Kazutaka Kuroda, EIRIS 5.65 Abel Page, EthiFinance 1.85 Jean-Florent Helfre, Sustainalytics 1.85 Julia Leske, Corporate Analysis: Enhanced Responsibility (CAER) 1.85 Laura Nishikawa, MSCI ESG Research 1.85 Ric Marshall, GMI Ratings 1.810 Sun Xi, Sustainalytics 1.511 Vipul Arora, Solaron 1.212 Andrew Brengle, MSCI ESG Research 0.912 Andrew Gaynor, EIRIS 0.912 Andrew Logan, CERES 0.912 Arne Klug, Sustainalytics 0.912 Ben Spruzen, SIRIS (Sustainable Investment Research Institute) 0.912 Cornelia Maul, MSCI ESG Research 0.912 Elia Tarrega, Sustainalytics 0.912 Emmanuel de la Ville, EthiFinance 0.912 Esther Hougee, Sustainalytics 0.912 Friedel Huetz-Adams, Suedwind-Institut 0.912 Gaëtan Mortier, MSCI ESG Research 0.912 Hannah Watson, EIRIS 0.912 Hideki Suzuki, Bloomberg 0.912 Jaideep Singh Panwar, Responsible Research 0.912 James Leaton, Carbon Tracker 0.912 Jeremy Grantham, GMO 0.912 Nikki Gwilliam, Vigeo (Rating) 0.912 Paul Hodgson, GMI Ratings 0.912 Philippe Spicher, Inrate 0.912 Susanne Marttila, oekom research AG 0.912 Tessa Younger, PIRC 0.912 Tony Czarnecki, Sustensis 0.912 Vanessa Ardenti, Inrate 0.912 Zach Larkin, Stephens 0.9
IRRI Survey 2012 11
Named analysts
The following analysts were also named by voters in this category:
Amandine Marquès (MSCI ESG Research ), Ahmar Zaman (Piper Jaffray & Co), Akiko Shimizu (SIRIS (Sustainable Investment Research Institute)), Alessandro Bracaglia (EIRIS), Alison George (Regnan), Barbara Evans (Bloomberg), Daniela Perito (INrate), Dietrich Wild (oekom research AG), Ellen Mayer (oekom research AG), Eugenia Fabon Victorino (Responsible Research), Helena Hernando (Sustainalytics), Helena Philipova (ASSET4 (Thomson Reuters)), Ian Thomson (On Common Ground), Jenny Blinch (Responsible Research), Jowoon Park (Korea CSR Research Service), Julius Hansen (IMUG), Libby Edgerly (MSCI ESG Research ), Marc Fox (Carbon Disclosure Project), Markus Gruenewald (IMUG), Matthew Barg (Sustainalytics), Meriem Saber (Vigeo (Rating)), Michael Lew (Needham & Co), Naomi Selby (EIRIS), Noushin Khushrushahi (SHARE: Shareholder Association for Research and Education), Oliver Jackson (EIRIS), Ornella Di Iorio (Vigeo (Rating)), Samuel Block (MSCI ESG Research ), Sébastien Marquet (EthiFinance), Stephane Genilloud (INrate), Susan Williams (Sustainable Investments Institute (Si2)), Tamara Hardegger (Thomson Reuters), Tim Vandenberg (Washington Analysis), Typhaine de Borne (EIRIS), Yulia Reuter (MSCI ESG Research )
IRRI Survey 2012 12
SALES / CLIENT RELATIONS (SRI & CG)
BEST CLIENT RELATIONS / SALESPERSON FOR SRI & CORPORATE GOVERNANCE RESEARCH
Named sales/client relations people
The following sales/client relations people were also named by voters in this category:
Abel Page (EthiFinance), Alan MacDougall (PIRC), Andre Chanavat (ASSET4 (Thomson Reuters)), Barbara Evans (Bloomberg), Brian Grzymski (GMI Ratings), Brian Walker (ISS (Institutional Shareholder Services)), Cedric Lagrange (MSCI ESG Research), Claire Veuthey (Responsible Research), Dayna Linley (Sustainalytics), Dean Paatsch (Ownership Matters), Drew Buckley (GMI Ratings), Elia Tarrega (Sustainalytics), Gavin
Anderson (GMI Ratings), Ives Hup (Petercam), Jillis Herpers (MSCI ESG Research), Jorgen Mork (MSCI ESG Research), Kazutaka Kuroda (EIRIS), Kimberly Gladman (GMI Ratings), Lindsay Smart (Vigeo (Rating)), Marcus Relthford (ISS (Institutional Shareholder Services)), Margaret Apsey (ISS (Institutional Shareholder Services)), Martina Macpherson (MSCI ESG Research), Matthias Boenning (Oekom Research), Michelle Friedman (MSCI ESG Research), Nancy Diard (MSCI ESG Research), Noel Friedman (MSCI ESG Research), Paula Glick (SIRI), Peter Chapman (Shareholder Association for Research and
Pos. Analyst Percentage1 Darragh Gallant, Sustainalytics 11.12 Diederik Timmer, Sustainalytics 8.13 Antonio Celeste, Sustainalytics 7.84 Lisa Hayles, EIRIS 4.25 Howard Sherman, GMI Ratings 3.36 Vipul Arora, Solaron 3.07 Tal Ullmann, Sustainalytics 2.78 Florence Bihour-Frezal, Vigeo (Rating) 2.48 Julia Haake, Oekom Research 2.410 Eva Meyer, MSCI ESG Research 2.111 Andrea van Dijk, Sustainalytics 1.811 Duncan Paterson, Corporate Analysis: Enhanced Responsibility (CAER) 1.811 Irene Sosa, Sustainalytics 1.811 Jean-Florent Helfre, Sustainalytics 1.811 Martijn van Schaik, Sustainalytics 1.811 Philippe Spicher, Inrate 1.817 Emmanuel de la Ville, Ethifinance 1.517 Mairead Hancock, EIRIS 1.517 Mark Bytheway, SIRIS 1.517 Naomi English, MSCI ESG Research 1.517 Patrick Blake, MSCI ESG Research 1.517 Paul Hewitt, Manifest 1.517 Sebastian Brinkman, MSCI ESG Research 1.524 Laurence Loubieres, Sustainalytics 1.224 Nelle Coady, MSCI ESG Research 1.224 Randy O'Neil, MSCI ESG Research 1.2
IRRI Survey 2012 13
Education (SHARE)), Pierre-Henri Leroy (Proxinvest), Rick Bennett (GMI Ratings), Rick Melcher (GMI Ratings), Robert Klijn (Fair Impact), Sarah Smith (Sustainalytics), Sarah Wilson (Manifest), Silke Riedel (IMUG), Stefanie Phelan (SIRIS (Sustainable Investment Research Institute)), Stefano Gilardi (INrate), Terence Berkleef (Sustainalytics), Till Jung (Oekom Research), Tyrene Peterman (MSCI ESG Research), Ulrika Hasselgren (Ethix)
IRRI Survey 2012 14
RESEARCH AND INNOVATION – DELIVERED IN 2011/2012
MOST INNOVATIVE PRODUCT / RESEARCH PIECE PRODUCED IN 2011/2012
The following organisations/pieces received multiple votes for the best research and innovation delivered in 2011/12:
• Sustainalytics (9 votes) – 3 for Fracking under Pressure; 2 for Insurance and Climate Change; 1 each for industry reports, controversies product and country risk manager
• MSCI (6 votes) – for webinars, sovereign debt coverage and sector reports
• Solaron (5 votes) – for coverage of emerging markets and use of stakeholder interviews
• GMI (4 votes) – 3 for GMI Analyst; 1 for reports on compensation & diversity
• Responsible Research (3 votes) – all for the Future of Fish in Asia
• Si2 & IRRC (2 votes) – both for Investor Guide to Hydraulic Fracturing
• EIRIS (2 votes) – 1 for sovereign debt research & 1 for sustainability ratings
All mentions
Firm Research/Product VotesBloomberg ESG Model 1Carbon Tracker Unburnable Carbon 1Center for Corporate Accountability Political Spending Disclosure Index 1EIRIS Sovereign Debt 1EIRIS Sustainability Ratings 1Environmental Investment Organisation Carbon Rankings 1Ethifinance Global Risk Rating 1FTSE4Good ESG Ratings 1GMI GMI Analyst 3GMI Reports on compensation & board diversity 1
ICCR Annual Proxy Voting Book; Social Sustainability Resource Guide; Guidelines on Investment in Commodities
1
ICGN Model Mandate 1Inrate Focus on empirical evidence of ESG data 1KPMG Megaforces 1Maplecroft Country reports 1McKinsey Resource Efficiency Report 1MSCI Industry reports 2MSCI Sovereign debt coverage 2MSCI Webinars 1MSCI IVA reports 1Pictet How to survive the next crisis: Is SRI the silver bullet? 1Responsible Research The Future of Fish in Asia 3Si2 & IRRC Investor Guide to Hydraulic Fracturing 2Solaron Emerging Markets coverage & use of stakeholder i’vws 5Suedwind Institut Im Boden der Tatsachen 1
IRRI Survey 2012 15
Firm Research/Product VotesSustainalytics Industry Research Reports 1Sustainalytics Country Risk Manager 1Sustainalytics Controversies Product 1Sustainalytics Fracking Under Pressure 1Sustainalytics Insurance and Climate Change 2Sustainalytics Free, Prior and Informed Consent in the Mining Industry 1Sustensis Long-term value tracker 1Transparency International Extractive Industry Report 1Trucost Why env externalities matter to inst’l investors 1Vigeo Farm Animal Welfare 1WWF Investor Engagement Programme 1
IRRI Survey 2012 16
RESEARCH AND INNOVATION - FRUSTRATIONS
MOST FRUSTRATING PRACTICE BY SRI / CORPORATE GOVERNANCE RESEARCH ORGANISATIONS
Responses to this question were articulate and comprehensive. We have therefore taken the view that reproducing them in full is more valuable than attempting to summarise them.
‘Outdated research that shows a snapshot of a time that has passed (e.g. indicating the board is all male when, in fact, a woman has recently been appointed.) I always check the RNS feeds to double check the status of the board.’
‘Insufficient engagement with their own stakeholders other than customers.’
‘A box-ticking approach that fails, for example, to look at the underlying impacts of a practice (or lack thereof) on the business.’
‘Removal of previously covered companies from MSCI's research. They remove previously covered companies if they are no longer on the MSCI World Index. It makes it impossible to have an historical databank of information on a given company. It's inscrutable.’
‘Claiming that large corporates are sustainable. They are not. Small parts of their businesses may be. SRI ratings need to be seen in context of the real impacts of big corporates.’
‘I still do not see well-researched methodologies for tying ESG issues to stock returns.’
‘There is little value in pointing out something that has gone wrong after it has happened as evidence that ESG is material.’
‘Three weaknesses: Box-ticking approach; lack of reactivity in terms of research; lack of contacts with analysts (e.g. through presentations to explain methodology). Some of these are evolving positively at some providers.’
‘Out-of-date SRI research.’
‘Delays of several days to time-driven research questions.’
‘I'm tired of tick-box research. There should be more standardisation. I appreciate Sustainalytics' sector reports and issues surveys. Also Solaron research on specific topics of emerging markets listed stocks - which reveals hidden bad practices.’
‘Cheap services enabling clients to 'box tick'.’
‘Time lapse in communication - especially at AGM time.’
‘Box-ticking practice that does not take into consideration particuliarities of the company, including its risk environment.’
‘Shadowing one another's research.’
‘Lack of coverage emerging markets.’
‘Incorrect data or, worse, data that is displayed as fact without evidence behind it.’
‘Questionnaires.’
‘Lag in data updates.’
‘Lack of consistency when grouping sub-categories of research.’
‘Answering a specific & concrete critiques of individual company ratings by re-stating their rating policies.’
‘Not mainstreaming their research. If you write a niche piece, it will stay a niche piece.’
‘Not respecting timeliness.’
‘Not providing the date of most recent update. 'Me too' research rather than moving to another topic.’
‘Corporate governance indicators could be more standardized. While specific answer categories and ratings are up to the individual analyst/organization, it would be nice to have consistency in what is covered.’
‘Providing loads of data with no context.’
‘Not dealing in real costs.’
IRRI Survey 2012 17
‘Lack of professionalism in the average analyst.’
‘A lot of the reports point out shortcomings compared to the benchmark of reporting that larger companies with more resources provide to the market. Plus some of the indicators are not largely material.’
‘Lack of available Asian governance research.’
‘Their separation from the rest of the company's research. I wish it was more embedded.’
‘Limited access to analysts.’
‘Lack of analytical research or real value adding research which is good enough quality to jolt a financial analyst's interest.’
‘Not taking steps--when they are relatively minor--to provide ESG coverage for companies included in multiple indices that your firm offers.’
‘Many ESG research templates are still not sufficiently sector-specific. SRI research organisations still need to improve the sector expertise of their analysts (esp. that of more junior staff who write the bulk of company research).’
‘Filling out surveys.’
‘Vigeo analysis.’
‘American organizations speaking on Canadian oil sands issues without necessarily understanding the issues. Inconsistency of analysis and recommendations of Proxy advisors.’
‘Sending questionnaires.’
‘Influence of Corporate Governance ratings agencies.’
‘To rate companies without checking all information.’
‘Lost connection to financial impacts.’
‘Lack of time given to fully research a company.’
‘Box-ticking practices; a focus on what companies say instead of what they actually do; analysis relative to peer group best practices instead of relative to an absolute sustainability reference point.’
‘Ratings. Formulaic repetition of sector data for companies without highlighting deviations & differences for specific companies.’
‘A lack of comprehensive governance data and analysis and a lack of data and analysis of positive ESG indicators and ESG opportunities.’
‘Vague links to financial impacts and relevance to mainstream application.’
‘This is changing but some research organisations are just data providers instead of having a fundamental understanding of material ESG issues in sectors.’
‘All products and data are not on the same platform.’
IRRI Survey 2012 18
RESEARCH AND INNOVATION – WANTED FOR 2012/2013
WHAT DEVELOPMENT WOULD YOU MOST LIKE TO SEE IN SRI / CORPORATE GOVERNANCE RESEARCH IN 2012?
Responses to this question were articulate and comprehensive. We have therefore taken the view that reproducing them in full is more valuable than attempting to summarise them.
‘More focus on marine resources, animal welfare and biodiversity.’
‘More training and professional qualifications designed for the sector.’
‘Anything that encourages increased shareholder activism.’
‘More research into corporate bonds issued by private companies & expansion of ESG research in emerging markets.’
‘ESG performance for companies that shows performance on sector-specific KPIs over the full life of company coverage. This would be a great way to measure progress.’
‘SRI should become more predictive in nature and give signals that enable investors to take buy/hold/sell calls. There should be a more frequent update by companies in terms of their ongoing ESG efforts, (similar to quarterly results).’
‘Clearer communication on goals and progress. Also, more transparency, more knowledge building to take the ESG issues to the next level.’
‘More comprehensive ESG research on emerging market companies.’
‘Use of risk/opp analysis beyond ESG. For example by looking at how to measure other intangibles like corporate culture. Geographic risk mapping to assess exposure to risks in countries of operation.’
‘(1) True measurement of factual sustainability & (2) More quality - less quantity.’
‘ESG scoring communication.’
‘More research on smaller companies. Too much focus is given to the large caps. More research on
companies outside of the US and Europe. More evaluation and analysis, less raw data.’
‘That it is taken up by more mainstream asset managers.’
‘From an asset manager's perspective, brokers are extremely valuable because they can be reached easily and know their topic well. We do not have the same ‘access’ to SRI or CG research analysts so would be good for them to try to develop direct one-on-one relationships with asset managers.’
‘Greater distinction and differentiation between exclusionary SRI research and risk-based ESG analysis.’
‘That ESG firms move to create the first investment fund ESG rating, since many SRI funds are now in the market without a clear differentiation, distorting heavily the SRI market.’
‘Greater uptake of quality ESG research by asset managers.’
‘More on sovereign debt and how to incorporate this into investment decisions. Also information on how to rank countries on different topics (e.g. human rights etc.).’
‘For ESG research providers to be seen as core, crucial providers and not a 'nice-to-have.'
‘Research companies to include interviews with companies on their research; research companies redressing their bias against small and midcap (brought about by smaller companies' lack of formal reporting).’
‘More research into the benefits of good management of ESG impacts on investor value.’
‘Standardization.’
‘Stronger linkages to core business drivers within industries, and broader research to support fixed income and alternative investments.’
IRRI Survey 2012 19
‘Increased disclosure by companies would allow research providers to conduct more relevant comparisons. Increased disclosure around water and biodiversity specifically.’
‘Ergonomy of the databases.’
‘Risk reporting by theme.’
‘Genuine willingness from asset managers to invest in this area.’
‘Standardized reporting based on EU Commission recommendations. Comparability of the information.’
‘Integration of CSR risks into the analysis.’
‘More performance data.’
‘More trend indicators of ESG rating and performance.’
‘Further effort on delivering verified and comparable SRI data about companies.’
‘More structuring of qualitative information on the basis of GRI reporting standards.’
‘More sophisticated and honest ESG integration.’
‘A transition towards ESG beta, and collective investment strategies regarding inclusive green growth.’
‘More research on indigenous relations, corruption, risks and opportunities related to water scarcity.’
‘Addressing the ethical implications of investing in raw materials. This is relevant for PRI, Global Compact, and covers the entire mainstream investment scene.’
‘Integration into mainstream reporting. Or is that too optimistic? Perhaps showing the materiality of SRI: the financial implications of supposedly 'non-financial' issues.’
‘More webinars that pair research firms with NGOs and asset managers to discuss emerging issues collaboratively.’
‘The understanding that we are moving away from negative screening & exclusion still often being presented as ESG integration. An increased understanding that there is no such thing as an
'absolute ESG rating'. It is not about trying to fill every datapoint.’
‘Challenging the assumptions underlying mainstream research to shift it to what a sustainable world means for future value, rather than just assuming historical performance will repeat itself.’
‘Standardisation of reporting to better benchmark firms.’
‘Certification of CSR data.’
‘Quantification in terms of costs/gains, if possible, of CSR impacts.’
‘More companies covered by SRI research.’
‘More access to relevant ESG raw databases.’
‘Analysis of the cost to companies from lack of attention to social issues. While the business case is clear, I've not seen much on the costs of inadequate human rights due diligence. Examples of this by sector / industry would be helpful.’
‘More corporate governance metrics.’
‘Better quality and more research coverage of Asian companies, especially smaller listed Asian companies.’
‘Stronger focus on materiality - when and how ESG issues are material.’
‘Thematic reports that promote engagement on sensitive environmental and social issues.’
‘Wider attention to shareholder resolutions being filed throughout the world.’
‘Energy and water nexus; diversity at board / senior management level; conditions for next green agricultural revolution.’
‘I think it would greatly benefit the field if all players (users and providers) make a clearer distinction between 'values'-oriented research (exclusionary, norms-based) and financially-material ESG factors. Mixing the two confuses the aims of both.’
‘For asset managers and asset owners to provide greater public transparency on their understanding of and adoption practices of ESG within their investments. For their commitment to be spoken
IRRI Survey 2012 20
about with greater conviction, outside of the immediate SRI community.’
‘Asset owners taking their responsibilities under the Stewardship code very seriously and reporting annually on their progress including some trend analysis.’
‘I am afraid that we may lose some content as non-SRI firms begin to ‘integrate’ ESG research into the investment decisions. Hope research still is catered to deep-diving, truly integrated institutions.’
‘Fixed Income research; materiality of different SRI / Governance issues.’
‘Integration of an ‘economic’ sustainability dimension.’
‘Embedding sustainability within annual report, including the use of natural capital and likely costs. More interconnection between fund managers and SRI analysts.’
‘The aspect of integrity, corporate culture, best measured via identification of breaches and how this translates into higher risk premium in case of poor crisis management and measures.’
‘A continued movement toward integration of ESG research into fundamental research.’
‘Clear (but limited) ‘fail’ list for companies whose governance performance falls FAR below needs/expectations.’
‘ESG analysis for alternative asset classes.’
‘More in-depth attention to the intersection of technology and civil liberties.’
‘More analysis / elements on executive pay.’
‘More sector-specific insights.’
‘I would like to see service providers have more analysts with industry experience (e.g. a banking analyst who had actually worked in banking, or an oil analyst or worked for an energy company). We primarily rely on our own buy-side analysts because their experience.’
‘Two separate scoring systems, one based on disclosure and one based on performance with Y-o-Y graphs.’
‘Concrete integration of ESG across AUM and asset classes - which requires buy-in from senior management.’
‘Increased dialog between SRI Research Providers and Asset managers.’
‘Regulation of proxy advisor services.’
‘Is impact investing detracting from SRI growth?’
‘Clarifying the SRI versus ESG spaces: there is room for both and they pursue different goals but this has not been clearly set yet. Should be a priority for all players and would help serving the needs of the respective players.’
‘More commitment of 'traditional' broker/asset managers. New entrants / products.’
‘More info about the effects of global warming and climate change.’
‘Further integration of financial and non-financial analysis. Show profitable business cases initiated by non-financial issues.’
‘Mainstream adoption.’
‘Effective use of research for informed decision making and not just compliance.’
‘Further integration of sophisticated sustainability strategy and performance into investor communications (roadshows, annual reports etc.).’
‘Political risk analysis, issues related to business ethics, energy efficiency/reduction strategies, green building norms, information on access to finance (microfinance, microcredit, zero savings accounts, micro loans, etc), impact investing etc.’
‘New product in country sustainability.’
‘Development of engagement activity.’
‘Innovative research approaches.’
‘Further movement away from tick-box approach; nuanced understanding of different ways public companies can promote corporate governance / ESG performance etc.’
‘Contextualising of ESG information within an investment context; fewer errors; less reliance on formulae and ratings.’
IRRI Survey 2012 21
‘A service for experienced analysts rather than those needing starting points and initial guidance.’
‘Inclusion of positive indicators, which would enable the users to capture ESG opportunities better.’
‘More governance research and better financial application.’
‘Commonality over acronyms. Drop SRI and use the term ESG.’
‘Focus on what really matters for a company, where does a company have the biggest impact, where are its biggest risks and opportunities.’
‘More legitimacy and increasing integration with financial data.’
‘Wider company coverage in Emerging Markets.’
‘Real integrated web-based platform for all products: more features, better design, user-friendly.’
‘Data should be updated on an ongoing basis as soon as data change (ex: change in management, new sustainability information.’
IRRI Survey 2012 22
ASSET MANAGERS – BEST USERS OF SRI/CG RESEARCH
WHICH ASSET MANAGERS MAKE BEST USE OF SRI / CORPORATE GOVERNANCE RESEARCH IN YOUR OPINION?
Named asset managers
The following asset managers were also named by voters in this category:
Australian Ethical Investment, Acadian, Advanced Investment Partners (AIP), AGI, Aperio, APG, Auriel Equities, Ausbil, Baillie Gifford, BAWAG P.S.K. Invest, Blackrock, Boston Common Asset Management, BT Investment Management, Caisse de dépôt, Calpers, CCR AM, Clearbridge Advisors, Colonial First State Global Asset Management, Dexia Asset Management, Ecofi Investissements, Equigest, ERAFP, Ethiea Gestion, Financière de Champlain , Financière de l'Echiquier, Generation Investment Management, Goldman Sachs Asset Management, Groupama AM, Hermes, HSBC Asset Management, Hunter Hall, Industry Funds Management, ING Bank, Invesco, Investec Asset Management, Jantz-Morgan, JP Morgan AM, Kempen Capital Managers, La Financière Responsable, Lazard Asset Management, Legg Mason Investment Counsel, Macif Gestion, MN
Services, MSCI ESG Research, NEI Investments, Newton IM, Nikko Asset Management, Osmosis, Paradice, PAX World, Perpetual, PGGM, Philips, Phitrust, Pictet Asset Management, Portfolio 21, Rockefeller Financial, Sampension, Schroders, SNS Asset Management, Solaris, Standard Life, Strorebrand, Sustainable Capital, Sustainalytics, SWIP, Swisscanto, Sycomore, Threadneedle, TIAA-CREF, Trillium Asset Management, Triodos Investment Management, UBS Asset Management, Union, USS, Vontobel AM, Walden.
Pos. Firm Percentage1 Co-operative Asset Management 9.92 Sparinvest AM 7.73 Calvert Investments 4.84 Amundi 4.14 Bank Sarasin 4.16 F&C Asset Management 3.37 Axa IM 3.18 Sustainable Asset Management 2.99 Allianz Global Investors 2.7
10 Nordea Investment Management 2.511 BNP Paribas Investment Partners 2.112 Aviva Investors 1.912 Natixis AM 1.914 DWS/DB Advisors 1.714 Norges Bank Investment Management 1.716 Robeco 1.4
IRRI Survey 2012 23
ASSET MANAGERS – BEST COMMUNICATORS OF SRI/CG NEEDS
WHICH ASSET MANAGER IS BEST AT COMMUNICATING ITS RESEARCH NEEDS TO SRI RESEARCH PROVIDERS?
Named asset managers
The following asset managers were also named by voters in this category:
APG, ASN Bank, Auriel Equities, Australian Ethical Investment, BNP Paribas Investment Partners, British Columbia Investment Management Company, BT Investment Management, carpers, Colonial First State Global Asset Management, Ecofi Investissements, Equigest, ERAFP, F&C Asset Management, Generation Investment Management, GLG Partners, Groupama AM, Industry Funds Management, Ircantec, Kempen Capital Managers, Legg Mason Investment Counsel, Nordea Investment Management, Norges Bank Investment Management, PAX World, Perpetual, Pictet Asset Management, Portfolio 21, RBC Wealth Management, Royal London Asset Management, SNS Asset Management, Standard Life, Sustainalytics, Swisscanto, Threadneedle, TIAA-CREF, Triodos
Investment Management, UBS Asset Management, Vinis (VBV Group), Vontobel AM, Walden.
Pos. Firm Percentage1 Co-operative Asset Management 9.82 Calvert Investments 8.43 Sparinvest AM 5.34 Amundi 4.45 Axa IM 3.65 Bank Sarasin 3.65 CCR AM 3.68 Robeco 3.18 Sustainable Asset Management 3.110 Investec Asset Management 2.711 Aviva Investors 2.211 DWS 2.211 La Financière Responsable 2.214 Allianz Global Investors 1.814 Calpers 1.814 Rockefeller Financial 1.8
IRRI Survey 2012 24
ASSET MANAGERS – IMPROVING COMMUNICATIONS
WHAT COULD ASSET MANAGERS DO TO INFORM SRI / CORPORATE GOVERNANCE RESEARCH PROVIDERS BETTER ABOUT THEIR SPECIFIC RESEARCH NEEDS?
Responses to this question tended to be multiple variations on the theme of: “Tell us more about what you need”; “Tell us more about your research processes”; “Tell us more about how you and your portfolio managers use the information that we provide”. We’ve selected a few responses that we think are most clearly articulated and a couple of less common but interesting ideas:
‘Meet with them, take them through a typical day and how the research is used, feedback as and when comments come to light, have higher expectations, commission research.’
‘Clearly define their view of 'materiality' and what is material to them - with evidence where possible.’
‘Be more specific about how the SRI teams work with the portfolio managers, and to what extent the PMs value and integrate SRI inputs.’
‘Workshops between users of research and research providers would be helpful - to strengthen feedback and to identify coherent response to common needs.’
‘Take more time to explain what they do exactly including what has worked with previous research suppliers, what has not worked, what their requirements are in terms of reporting to clients etc.’
‘Be willing to pay for it.’
‘Communicate needs to all the providers.’
‘Work more closely with research providers on implementing ESG strategies into their models, and include the research providers more in policy and product development.’
‘Participate in surveys.’
‘Work out what they are first! Asset managers often feel they should ask for stuff they don't necessarily want.’
‘Better communication with analysts. Particularly about clients needs and any company engagement that they have had.’
‘Explain clearly how they want to integrate ESG. There is still a lot of knowledge lacking at asset managers that are talking about integration while in reality they are being old style SRI investors. Be clearer where and who you are and what you are ready to achieve.’
‘Put fundamentals / mainstream analysts in touch with SRI analysts and research providers, provide additional information on how they are using the research in their processes, be proactive at beginning discussions on specific themes of interest.’
‘It is useful to know the varied uses and users within their organization of ESG research. I think a more interactive, collaborative approach will help research providers better tailor the offering -- and prioritize coverage and functionalities.’
‘Allow the provider to spend more time with the investment teams to understand the systems and processes the research has to fit within, including the culture, physical location of teams, and how information will be shared.’
‘Prepare simple, clear RFP documents which include an overview of the investors beliefs concerning the links between sustainability factors and investment returns.’
‘Pay properly!’
‘More face-to-face meetings. More check-in queries by the research providers on the asset managers impression of the research (overall) or specific piece. More responsiveness and outreach by service providers.’
IRRI Survey 2012 25
‘Proactively communicate their needs in writing. Share information on their process and users, and specific examples of what has been helpful/not helpful.’
‘Have more informal conversations during industry conferences.’
‘We often question the AMs on their needs during what we call ""consultation process"" and rarely get a clear responses as everything seems to be a priority to them. So getting more clarity on what should be prioritized would really help us in better meeting their needs.’
‘ESG teams or co-ordinators could explain how the portfolio managers use ESG data in daily investment decision-making.’
‘Pick up the phone!’
‘Clarity in terms of their objective. Describe clearly where they wouldn't want to invest and in what areas they are open to new information or trends.’
‘Communicate end-client requirements; Communicate the type of funds research is being applied to; Provide feedback on equities research.’
‘Co-sponsor the development of research product that they would use (e.g. specify, pilot, pre-commit) rather than forcing research providers to take stabs in the dark.’
‘Continue to meet with research providers to explain your needs and review their offerings - even if you have never used their services.’
‘Give feedback on existing products; propose new features / products to research providers; establish a partnership relationship with research providers - better than a commercial relationship.’
IRRI Survey 2012 26
QUOTED COMPANIES – BEST COMMUNICATIONS
WHICH (QUOTED) COMPANY IS BEST AT COMMUNICATING ITS SUSTAINABILITY & CORPORATE GOVERNANCE PERFORMANCE TO YOU?
Pos. Firm Percentage1 Unilever 4.82 Royal Dutch Shell 3.93 Intel 2.63 Novo Nordisk 2.65 Marks & Spencer 2.46 BMW 2.26 Danone 2.26 L'Oreal 2.29 BP 1.79 Nestle 1.79 Philips 1.712 Dell 1.512 STMicroelectronics 1.514 AGL Energy Ltd 1.314 AkzoNobel 1.314 Bayer 1.314 Fiat Group 1.314 GSK 1.314 Intesa Sanpaolo 1.314 Microsoft 1.314 MSCI 1.314 Pirelli 1.314 Renault 1.324 Air Liquide 1.124 Bombardier 1.124 BT Group 1.124 DSM 1.124 EDP 1.124 Generali 1.124 Henkel 1.124 PepsiCo 1.124 RWE 1.1
IRRI Survey 2012 27
Named companies
The following companies were also named by voters in this category as being good communicators:
Adidas, Aggreko, Allianz, American Water Works Co, Anglo American, AngloGold Ashanti, Apple, AstraZeneca, Baker Hughes, Bank of America, BASF, BBVA, BHP Billiton, BIC, BNP Paribas, Campbell's Soup Company, Capgemini, Casino, China Shenhua, Citigroup, CN Railway, Coca-Cola, Coca-Cola Amatil, Deutsche Bank, Deutsche Boerse, Diageo, Dow, DuPont, Enquest, Essilor, Exxon, Fortum OYJ, GDF SUEZ, Geberit AG, Gecina, Gildan Activewear, Goldman Sachs, GPT Group, Groupe Steria, H&M, Hammerson , Heineken, Hewlett-Packard, Holcim, Holmen, iberdrola, IBM, Imerys SA, Insurance Australia Group , INTC, Kingfisher , Lafarge, McDonald's Corp, Medtronic, Michelin, Millicom, MunichRe, Nike Inc, Origin Energy, Outokumpu, Petrobras, PPR, Range Resources, RBS, Repsol, Rhodia, Rio Tinto, Roche, Ruukki, Sanofi, SAP, SCA, Schneider Electric, SEB, Severn Trent, Siemens, Smith & Nephew, Societe Generale, Sonova, Standard Chartered, Staples, Stockland, Stora Enso, Storebrand, Suez Environnement, Suncor, Swire Pacific, Symrise, Teck Resources, Telecity, The Gap, Toronto Dominion Bank, Tullow Oil, Umicore, UniCredit, Vodafone, Westpac Bank
IRRI Survey 2012 28
QUOTED COMPANIES – IMPROVEMENTS
WHAT COULD COMPANIES DO TO IMPROVE THEIR COMMUNICATIONS TO YOU ON SUSTAINABILITY & CORPORATE GOVERNANCE MATTERS?
Responses to this question were articulate and comprehensive. We have therefore taken the view that reproducing them in full is more valuable than attempting to summarise them.
‘Would prefer to see downloadable CSR/Sustainability reports rather than interactive online versions without search facilities.’
‘Online databases.’
‘More GRI reporting.’
‘Focus on sustainability issues that they view as most material to their future prospects, provide quantitative data that is comparable over time and with industry peers.’
‘Answer our questions; use standardized reporting.’
‘Transparency on coverage of information reported (policies, indicators, measures); simplify their reporting to key managerial elements put in place.’
‘Harmonize quantitative indicators further (i.e. use the same indicators, with comparable scope, and stick to them over time.) This requires some industry synchronization of reporting efforts. Fo further in the structuring of qualitative information.’
‘More KPIs/hard facts.’
‘Make their webcasts easier to log into.’
‘Use GRI reporting standards; use consistent metrics each year; include clear and quantifiable goals and report on progress to those goals.’
‘Organise more meetings.’
‘Make them integral to company strategy, not an extra - explain why sustainability is at the heart of how they do business. If it isn't, then don't bother talking about it.’
‘Detailed carbon footprint, dialogue with their stakeholders, responsiveness to allegations and sanctions.’
‘Standardized integrated reporting would be beneficial. Most American companies do well with reporting corporate governance matters, but do not do well reporting on sustainability issues (no integrated with 10Ks or stand alone CSR reports).’
‘Use GRI, including sector supplements. Use data charts to summarize performance, and progress on goals, with at least 3, but preferably 5 years of data - and place all charts in a single section of reports.’
‘Annual ESG roundtables/lunches with key figures, participating in webinars/seminars etc be willing to talk through questions as and when they arrive … and answer my correspondence!’
‘Integrated reporting.’
‘Meet with investors - not only on Environmental and Social issues but on Governance issues too. Integrate SRI and CG investor feedback in annual reporting.’
‘Be more honest about political donations and don't muddy the waters with PACs etc. Also more transparency on lobbying, donations to think-tanks and other astro-turfing activities.’
‘Incorporate sustainability information into the annual report, as recommended at the Rio+20 event. Lots of separate reports mean it’s easy to miss important ESG issues facing companies.’
‘I recommend regular mention of sustainability and corporate governance matters in investor presentations as well as specialized presentations (annually is sufficient) on these topics.’
‘Be more precise, communicate and publish clear policies and programs. Be more transparent about
IRRI Survey 2012 29
degree of progress and eventual aims. Use quantitative targets where relevant.’
‘Be more honest that they are not really sustainable, just moving very slowly in that direction. Say more about financial benefits and costs of their ESG strategies.’
‘Implement GRI reporting. Commit to the UN Global Compact. Provide data to CDP.’
‘Ignore the fluff (the 50 surveys and questionnaires that are not well designed and that ask for data they have already revealed). Put their GRI map in a place where it is easily accessible.’
‘Improve consistency in communication towards investors and research agencies. Increase public disclosure of multiple year data.’
‘Certification by external auditors; shorter reports; focus on KPIs, with historical data when possible; publish news on CSR/ESG issues (on a relevant and reasonable frequency: quarterly, semi-annual - just like financial communication.’
‘More distribution via general media.’
‘More regular ESG roadshows as opposed to ad hoc ESG investor meetings.’
‘Change the CSR departments from the communications department to the investor relations department, or much better create the Chief Sustainability Officer to report to the CEO & sit on the Executive Board.’
‘Better alignment with financial reporting cycles; disclose what is material in a comparable way.’
‘Take our suggestions to the board; work on remuneration transparency.’
‘Avoid ""cut and paste"" responses to questions on sustainability and corporate governance. Include as much performance data as possible to illustrate systems are working as well as descriptive comments to explain anomalies in performance data.’
‘Provide data sheets with 5 years of data.’
‘Return profiles to us with comments.’
‘Comparable and verified reporting on KPIs that are relevant to their business.’
‘They could systematically have their CSR data certified by an independent organisation.’
‘Provide measurable / quantitative information.’
‘Provide data such as ESG metrics and operational metrics in download-able spreadsheet format. Also, if a company tries to follow GRI guidelines, giving short and concise summaries of each GRI section would be helpful as opposed to giving a page reference.’
‘Have someone senior who is familiar with the requests of those interested in sustainabiliity/CG matters.’
‘Genuinely integrate their sustainability strategy, management and performance into their annual financial reporting.’
‘Have more disclosure of practices available in the public domain.’
‘Consistent use of KPI's (i.e. that cover a period of 3+ years) that are clearly disclosed in annual reports/CSR reports. Clear outline of board level responsibility for ESG issues.’
‘Companies should be transparent and comprehensive in their communications.’
‘Be transparent and consistent on year to year reporting. Include selected quantitative info on the key / strategic areas for the business and report them in the annual report and not a specific CSR report.’
‘Plain language discussion of the principles behind their activity - to demonstrate the extent to which they are aiming to control risks or add value - or the extent to which they are aiming to tick boxes.’
‘Offer to investors meetings with practitioners (purchasing managers, operational managers); Give more details on the inner workings and reality of operations for a board and its members.’
IRRI Survey 2012 30
‘Offer annual dedicated meetings with ESG teams and mainstream fund managers.’
‘Trim down CSR reports to focus on the material issues for a company. It's not about 120 page CSR reports. Make other relevant data available on their websites.’
‘More quantitative data on their improvements over the years.’
‘Sustainability Report in English is a must. It should be made according to GRI G3 guidelines. Top management roadshows with a special focus on ESG issues. Specialist company ESG presentations for investors.’
‘More concise reporting, more quantitative data and trasparency on senior and board responsibility for ESG issues. ‘
‘Understand that philanthropic programmes and initiatives are not relevant to analysing the effects of sustainability and corporate governance on operations; report data to Bloomberg ESG; work with brokers to organise SRI roadshows.’
‘More detail on environmental and social policies, processes, statistics and targets in general.’
‘Pare down their reporting and stick to what is most important. Fewer anecdotes, more data.’
‘Integrated reporting that shows how ESG issues are really embedded in the company's business model and strategy.’
‘Clear and easy accessible/user friendly documentation. Do not spread information out all over the website, AR, CSR & GRI reports. Please keep to the same format over the years with a good index.’
‘Integrated Reporting.’
‘They can separate the data from all the text and pretty pictures. We would most prefer that companies put their KPIs on one page, with achievements versus goals clearly listed. We prefer more quantitative metrics and fewer case studies.’
‘Integrate reporting of financial and non-financial issues.’
‘Special SRI investor days.’
‘Publish one single report on sustainability matters, including some links for some development, but without disseminating information all over their web site and many different reports.’
‘Report EHS performance data to a standard that enables benchmarking and compare their own performance to industry benchmarks. Provide access to operational management, especially on controversial issues.’
‘Make it easy to figure out, on their websites, what specific person to contact with questions and provide that person's email address.’
‘Communicate direct links between sustainability and competitiveness/financial performance.’
‘Integrated Reporting.’
‘More relevant and material quantitative data & metrics.’
‘Include all their up to date information in one place - either on the website or in an annual CSR report. Do not publish overlapping information in different places without clear indication as to which is the most recent information.’
‘Connect you to the company expert on whatever issue you are discussing.’
IRRI Survey 2012 31
EXTEL
Established in 1999, when Thomson Reuters acquired the Extel Survey from the FT Group (part of Pearson).
Initially 5 people, the team has expanded over the period 1999-2012 to a current strength of 25.
This expansion has both enabled us to develop the Pan-European Survey to become the leading indicator of investment industry opinion in Europe, and to respond to the demands we have had for additional survey and investment industry research consultancy work.
Our policy is to keep the consultancy team as small and focused as possible, in order that we provide direct service to each of limited number clients.
ACTIVITIES
• Thomson Reuters Europe • Thomson Reuters UK Small Caps • SRI (socially responsible investing)
(undertaken in conjunction with UKSIF – the UK industry group for social investing)
• Thomson Reuters Extel Asia & Japan • Consultancy projects on behalf of sellside
firms, buyside houses and quoted companies. We have undertaken a range of specific assignments over the last 6 years for organizations in all three of these areas. As is usual with this work, client names and the nature of the work remain confidential. They include a major US investment bank, several European investment banks, two UK-based FM institutions and quoted companies in insurance, pharmaceuticals, real estate and transport.
CONTACTS
Thomson Reuters Extel
The Thomson Reuters Building
30 South Colonnade
Canary Wharf
London E14 5EP, UK
T. +44 (0) 20 7542 7700
F. +44 (0) 20 7542 7704
www.extelsurveys.com
IRRI Survey 2012 32
SRI-CONNECT
SRI-CONNECT (www.sri-connect.com) is an online global marketplace for SRI research and meeting point for companies, investors and their respective advisors. It provides practical research resources and communications channels to accelerate the inclusion of sustainability factors in 'mainstream' analysis & investment.
The site enables users to:
• understand developments in SRI and its interface with 'mainstream' investment practice
• present themselves to the SRI industry and review the sustainability & investment activity of others
• manage information and relationships with peers, partners, suppliers and customers
SRI-CONNECT’S BUSINESS MODEL:
• 20% of the site’s value is free-to-view; • 40% requires registration (free, but only
available to those with a professional exposure to CSR, IR, SRI or CG);
• 40% requires a modest subscription (which costs less than one day at a conference!)
KEY FEATURES OF SRI-CONNECT:
• Market Buzz –peer to peer news channel highlighting what’s happening in global SRI
• Directory – SRI’s Who’s who’ containing profiles of over 5,000 companies, individuals, funds & indices
• Info & Comment – comprehensive & dynamic analysis of sustainable business & the SRI industry
• SRI Network – The SRI industry’s communications centre
SRI-CONNECT USER BASE
The site currently has over 1,500 registered users spread over the following geographies and user types:
Geographical spread of SRI-CONNECT users
• UK – 40% • USA & Canada – 16% • France – 10%; Rest of Europe – 25% • Asia – 4%, Australia – 3%, Other – 2%
Spread of SRI-CONNECT user types
• SRI research providers – 40% • Asset managers – 30% • Quoted companies – 10% • Asset owners – 3%, Investment consultants –
2% • Others (all with direct professional exposure
to CSR & SRI) – 15%
CONTACTS
Mike Tyrrell
Editor, SRI-CONNECT
T. +44 (0) 20 7119 6640
IRRI Survey 2012 33
