At its core, the framework seeks to answer one simple question: How do you govern and implement responsible investment?
Reporting is and has always been compulsory for all asset owner and investment manager signatories (following a one-year grace period for new signatories); details on the timing and grace period are available on the reporting process page. The new framework introduces elements of mandatory public disclosure for a subset of the information that signatories report.
A tutorial on how to use the online tool can be found here.
Signatories will report the breakdown of their assets under management, and whether they are internally or externally managed, in the Organisational Overview (OO) module. Based on this information, signatories will be required to report on certain modules. As a rule of thumb, if you hold 10% or more of your total AUM in a specific asset class, you will be required to complete the corresponding module. All signatories complete the Organisational Overview module (OO), Strategy & Governance module (SG) and the Closing Module (CM).
|Internally managed assets||Externally managed assets||Active Ownership|
|Signatories with internally managed assets will complete the ‘Direct’ modules based on the 10% rule above.||Signatories with externally managed assets will complete the Selection, Appointment & Monitoring (SAM) module, which covers almost all asset classes. Those with 10% more of their total AUM in externally managed Inclusive Finance will complete the Indirect – Inclusive Finance module (IFI).||Signatories that are coordinating the voting and engagement activities of their listed equities holdings in-house will complete the Listed Equities – Active Ownership module (LEA) if their listed equities holdings represent 10% or more of their total AUM.|
Each module contains both mandatory and voluntary to report indicators. From the 2013/14 reporting cycle, the Reporting Framework requires mandatory public disclosure of some indicators, relating to core practices or activities. However, additional information is required to identify which indicators are relevant for a particular signatory, and some indicators also refer to advanced or uncommon practices. For this reason, there are three types of indicators in the Framework:
- Mandatory indicators [~44% of all indicators]: Mandatory to report, mandatory to disclose. These reflect core practices and capture the essence of your implementation of the Principles. Not all indicators that are mandatory to report are also mandatory to disclose (see below). Responses to mandatory to disclose indicators will be made public.
- Voluntary indicators [~46% of all indicators]: Voluntary to report, voluntary to disclose. These reflect alternative or advanced practices. Signatories can choose whether to complete these indicators and whether to make the responses public.
- Mandatory to report, voluntary to disclose [~10% of all indicators]: These indicators gather information about activities to enable comparison with peers or to act as ‘gateway’ indicators to determine which modules and indicators are applicable to be completed later. They may request confidential or commercially sensitive information and are therefore voluntary to disclose.