SRI-C: Data ≠ Ratings ≠ Analysis
Understanding the supply of sustainable investment research
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There is a greater breadth and wider diversity of sustainable investment research in the market than most asset managers appreciate.
Capturing and filtering this breadth and diversity of research (by looking beyond DATA and RATINGS and sourcing ANALYSIS) through robust research selection practices is likely to be a pre-requisite for effective:
- integration of sustainability factors into investment decision-making and capital allocation by asset managers
- engagement with companies – particularly on issues that are sector or value-chain specific
'Integration' leading to investment decision-making and capital allocation is likely to be a critical differentiator between:
- those asset managers that are using ESG to cover off reputational risk (of their investments and themselves) and
- those that are investing into a transition towards sustainability
Equally, competitive differentiation in 'engagement' is progressing:
- From inputs (effort expended by the investor)
- Through outputs (corporate response effected)
- To outcomes (real world impact achieved)
We set out research identification process that we expect asset managers to follow / to have followed if they are to compete effectively in the sustainable investment market of tomorrow.
