INVESTMENT PRACTICES

The Investment Practices team produce guides, case studies, webinars and events to inform investors how to implement the Principles into their investment practices, in a systematic way, within each asset class.

ASSET OWNER INSIGHT

Asset owners can target long-term returns by incorporating ESG factors in the portfolio and in the selection, appointment and monitoring of managers.

CURRENT PROJECTS

The team is working closely on several fronts to provide responsible investment guidance and implementation support to asset owners. 

Investment strategies – developing practical guidance for asset owners to outline how robust fact-based investment strategies are developed and formulated.

Manager selection, appointment & monitoring – working closely with the Reporting and Assessment team to develop a tool that will provide asset owners with data from the Reporting Framework on investment managers’ responsible investment performance.

Investment policy – developing with signatories practical guidance on how to review existing investment policies to include ESG considerations.

Passive investment – creating a discussion paper guiding asset owners on how they can integrate ESG factors across categories passive investments.

KEY RESOURCES


Crafting an investment strategy – a process guidance for asset owners supports asset owners, including their board of trustees and executives, in developing and formulating their investment strategy, and outlines how ESG issues can be incorporated across six steps:

1. Assessment of the investment context

2. Development of mission and vision

3. Development of investment principles (including investment beliefs)

4. Investment strategy selection

5. Implementation

6. Communication

Investment Policy: Process & Practice – A Guide for Asset Owners provides a concise and implementable framework to support asset owners in revising their investment policy in order to incorporate long-term factors in their investment chains. The guidance covers the following aspects: 

  • Reviewing an existing investment strategy
  • Aligning stakeholders
  • Reviewing relevant legislation
  • Reviewing ESG investment guidance, terminology and debate
  • Undertaking a peer review. 


Also, it outlines the most common investment policy sections, including ways to incorporate ESG considerations:  

  • Introduction
  • Definitions
  • Purpose & scope
  • Investment objectives
  • Governance
  • ESG incorporation approaches
  • Active ownership & engagement 
  • Reporting


Aligning expectations – Guidance for asset owners guides signatories on incorporating ESG-factors into manager selection, appointment and monitoring was launched in February 2013.

It discusses:

  • setting expectations on managing ESG factors in a portfolio/fund;
  • including ESG-related expectations in RFPs, questionnaires and discussions;
  • approaches for evaluating potential and appointed managers.


How asset owners can drive responsible investment – Beliefs, strategies & mandates was published by the Policy team in March 2016. It outlines the key role asset owners play in getting ESG considerations incorporated throughout the investment chain. 

Writing a responsible investment policy - Guidance for asset owners, launched in September 2013, discusses responsible investment policy questions.  

Aligning values: Why corporate pension plans should mirror their sponsors, urges CEOs to ensure their corporate pension plans - an untapped sustainability resource - adopt responsible investing policies, highlighting concrete benefits including improved investment performance, fulfilling fiduciary duty, managing regulatory risk and boosting corporate sponsor credibility. Also Available in Portuguese and Japanese.

KEY CONTACT:  Catherine Chen


LISTED EQUITY

Responsible investment allows listed equity investors to make better informed investment decisions by integrating all material factors, including material ESG factors, into investment analysis, valuations and decisions.

KEY RESOURCES

A practical guide to ESG integration for equity investing

To guide investors – both asset owners and investment managers – who are implementing ESG integration techniques in their investment process, A practical guide to ESG integration for equity investing is the most comprehensive description to date of what ESG-integrated analysis is, and how it works in practice. 

The guide contains information and case studies on integration techniques that apply to investment strategies including fundamental, quantitative, smart beta and passive investment. It assists asset owners and investment managers with constructing ESG-integrated investment processes and helps asset owners to assess their managers’ integration practices.
A chapter on sell-side investment research maps out the types of ESG-integrated sell-side research available, and demonstrates sell-side brokers’ integration techniques.

Also available iKorean, Portuguese, Chinese and German.

A package of 10 case studies on green equity investing taken from the above report were separately released as Green equity investing: 10 case studies of integration which, is also available in Chinese.

Integrated Analysis (2013)

The 2013 guide Integrated Analysis provides 21 case studies on integration techniques used by fundamental managers and sell-side brokers. 

KEY CONTACT:  Justin Sloggett


FIXED INCOME

ESG analysis provides fixed income investors with additional insight into issuer creditworthiness.

CURRENT PROJECTS

Alongside an array of case studies and webinars on a range of topics relating to ESG and corporate, sovereign and other forms of debt, the PRI's major fixed income project for 2016/18 is to engage credit rating agencies to promote more systematic and transparent incorporation of ESG into credit ratings and analysis. For more details, see ESG in Credit Ratings Initiative or contact FI@unpri.org

KEY RESOURCES

Fixed Income Case Study Series

Written by fixed income practitioners from around the world, the PRI’s Fixed Income Case Study series highlights examples of interesting and innovative approaches to integrating ESG, negative and positive screening, thematic investment and engagement across the asset class. Sharing these examples enables investors to collectively build a concept of emerging good practice. If you would like to learn more or contribute your own case study please  review this brief.

The Impact of Energy and Climate on Sovereign Risk
BEYOND RATINGS
Screening and Engaging to Mitigate ESG Risks
FUTUREGROWTH
The Business Case for Considering ESG Dynamics in Sovereign Bonds
GLOBAL EVOLUTION
Community Development Programmes in Mexico
HSBC
ESG Risks and Opportunities in Affordable Housing Investments
BLOOMBERG
Green Bonds: Measuring Impact
KFW
ESG in UK Social Housing Investment
M&G
Corruption as an Indicator of Creditworthiness
UNION INVESTMENT
Integrating ESG Factors in Partnership with an NGO
WWF & ALLIANZ AUSTRIA
Resilience to Climate Change in the UK Water Sector
ROYAL LONDON ASSET MANAGEMENT
Education and European Government Bonds
BNP PARIBAS INVESTMENT PARTNERS
Providing Assurance for Investors Considering Credit Investments with a Social Impact
ATLANTIC ASSET MANAGEMENT
Quantifying the Impact of More Strictly Enforced Environmental Regulation
ITAÚ ASSET MANAGEMENT
Engaging with Issuers
KFW
Using the Extractive Industries Transparency Initiative to Enhance Credit Ratings Assessments
EITI

ESG Engagement for Fixed Income Investors: Case Study Series (2017)

Written by practitioners from around the world, this is the first major output of a PRI project to explore and clarify how ESG engagement is an integral part of responsible investing in fixed income.

Engaging with an Automaker Issuer
QIC
Engaging to Deepen Insight
BRECKINRIDGE CAPITAL ADVISORS
Engaging with a State-owned Enterprise Issuer
HERMES INVESTMENT MANAGEMENT
ESG Engagement in Private Infrastructure Debt
M&G
Engaging with a Security Services Issuer
MN
Engaging with Sovereign Green Bond Issuers
BNP PARIBAS ASSET MANAGEMENT
Engaging with Utilities and Global Bank Issuers
PIMCO

KEY CONTACT:   Anna Georgieva


ALTERNATIVES

PRIVATE EQUITY

Responsible investment is naturally aligned to private equity through its long-term investment horizon and stewardship-based style.

CURRENT PROJECTS 

PRI signatories that are limited partners (LPs) are required to report on their ESG incorporation practices for the three stages of selecting, appointing and monitoring their investment managers. The PRI is building tools to support these practices and create industry-consistent approaches. 

The PRI launched the LP responsible investment due diligence questionnaire in November 2015 and guidance on ESG provisions in fund terms in July 2017, covering ESG considerations in manager selection and appointment.

As a third step, the PRI has appointed ERM to work in partnership with PRI signatories and industry association partners to develop guidance for LPs and General Partners (GP) on how to report on and monitor the ESG integration practices of GPs during the lifetime of the fund. The PRI has formed a working group for this project. The Terms of Reference can be viewed 
here.

EVENTS

AVCJ-PRI ESG Forum, Hong Kong, 13 November (held adjacent to AVCJ 30th Annual Hong Kong Forum)

KEY RESOURCES

Incorporating responsible investment provisions into private equity fund terms (July 2017) identifies current and emerging practice, as well as potential constraints, and offers practicable options to LPs and GPs that are considering how they might incorporate responsible investment into fund terms.

How-to video on CDC ESG Toolkit for Fund Managers (December 2016) is a short video to demonstrate exactly how PRI signatories can use the highly valued and free-to-use Toolkit to best effect when developing their own approaches to responsible investment in private equity.

IIGCC-PRI guide on climate change for private equity investors (May 2016) provides guidance on assessing climate change risks and opportunities in private equity investments.

Report on progress: Private equity (March 2016) provides the most reliable snapshot of responsible investment in private equity to date, based on 306 PRI signatories’ submissions to the PRI Reporting Framework on their private equity investments in 2014/5.

LP responsible investment due diligence questionnaire (also available in Word and Excel format, and in French) and How to use it (November 2015) is an adaptable list of questions that LPs can ask GPs pre-commitment to understand and evaluate how GPs integrate material ESG factors into their investment practices.

Integrating ESG in private equity: A guide for general partners (also available in French), case studies supplement (also available in Japanese) and short summary (April 2014) advises GPs to develop a framework for integrating ESG factors into their investment activities, linking this to organisational governance, structure and culture.

The integration of ESG issues in M&A transactions: Trade buyer survey results (January 2013) summarises the results of a PwC survey into trade buyers’ attitudes towards evaluating ESG risks and opportunities in their M&A activities.

Responsible investment in private equity: A guide for limited partners, 2nd edition (June 2011) helps LPs to develop their approach to responsible investment in private equity.

KEY CONTACT :  Natasha Buckley


PROPERTY

The PRI has been working with UNEP FI’s Property Working Group (PWG) to explore how the Principles apply to property investment and management and the Global Real Estate Sustainability Benchmark (GRESB) to improve reporting.

KEY RESOURCES

Sustainable real estate investment, Implementing the Paris Climate Agreement: An Action Framework (February 2016) presents investors, managers and advisers with easy to understand and apply actions in a framework that distils relevant industry material published over the past five years.

Sustainability Metrics: Translation and Impact on Property Investment and Management (executive summary, flyer) (May 2014) provides a framework for corporate real estate sustainability management (CRESM) system for property investment and management organisations.

Commercial Real Estate: Unlocking the energy efficiency retrofit investment opportunity (February 2014) outlines why and how asset owners and managers can generate profitable energy efficiency investment opportunities and proactively manage them even in cases where payback is uncertain.

KEY CONTACT:  Archie Beeching


INFRASTRUCTURE

Responsible investment can mitigate risk in the typically long-term, project-based world of infrastructure investment. Incorporating ESG considerations into infrastructure investments can consist of including ESG clauses in RFP processes or managing ESG factors to increase exit value.

CURRENT PROJECTS

The PRI is relaunching a work stream on responsible investment in infrastructure to raise awareness on RI in infrastructure, provide industry guidance on incorporating ESG in infrastructure investing, share good practice, and promote investment into low carbon infrastructure. For more information contact infrastructure@unpri.org.
 

Green Infrastructure Investment Coalition  The aim of the Green Infrastructure Investment Coalition (GIIC) is to connect investors, development banks and advisors to countries seeking finance for green infrastructure developments. The work of the Coalition allows governments and project developers to present their pipeline of projects five years into the future (min. US$100 million deal size) and access new sources of funding from international investors, providing investors with early visibility of future deal-flow and give the opportunity to provide feedback on the structuring of financing instruments.

The GIIC is organised by the PRI, the Climate Bonds Initiative, ICMIF, UNEP Inquiry and LTIIA.

Webinars

For more information on the GIIC and the PRI’s infrastructure work, watch the webinar: Introducing the Green Infrastructure Investment Coalition (November 2016), including a preview of PRI’s proposed infrastructure strategy.

KEY RESOURCES

The case study compendium Responsible investment in infrastructure was published in March 2012.

It provides examples of how investors have incorporated ESG considerations into infrastructure investments.


HEDGE FUNDS

Working with investors, investment managers, industry associations and service providers through innovation and education to incorporate environmental, social and governance factors into the investment decision-making process.

KEY RESOURCES

The first industry standard Due Diligence Questionnaire for Hedge Funds (May 2017): to assist investors when assessing external hedge fund managers on their responsible investment policies and practices.

The DDQ can be accessed in alternative formats via AIMA and eVestment

Other resources:

Event summary: Responsible Investments for Institutional Investors in Hedge Funds (Nov 2017 New York)

A discussion paper on Responsible investment and hedge funds was published in March 2012.  It discusses how to apply the concept of responsible investment to hedge funds.


 


ENVIRONMENTAL & SOCIAL THEMED INvesting

Themed investing allows investors to address ESG issues by investing in specific solutions to them, such as renewable energy, waste and water management, sustainable forestry and agriculture, health products and inclusive finance.

KEY RESOURCES

Case studies: institutional investors’ environmental and social themed investments 

These case studies, published in October 2013, demonstrate how E&S themed investing can form a valuable part of an institutional investors’ approach to responsible investment. Each focuses on a particularly distinctive aspect of the investors’ process or the investments chosen.


COMMODITIES

Responsible investment in commodities allows investors to address risks such as: labour rights, human rights, land/resource rights, waste, water scarcity and pollution levels in assets, such as forests and agricultural land, and companies throughout the supply chain. Applying responsible investment to investments in commodity derivatives can address systemic issues such as volatile prices and unstable markets.

See all commodities publications, webinars and events on the Explore page.

KEY CONTACT:  Archie Beeching


Principles for Investors in Inclusive Finance

Investors can contribute to economic development and entrepreneurial activity by investing in inclusive finance, but these investments can carry financial and reputational risks. To mitigate such risks, a group of investors launched the Principles for Investors in Inclusive Finance (PIIF) in 2011.

The PIIF are housed within the PRI. In signing the Principles, investors commit to:

1. expanding the range of financial services available to low-income people;

2. integrating client protection into all their policies and practices;

3. treating their investees fairly, with clear and balanced contracts, and dispute resolution procedures;

4. integrating ESG factors into their policies and reporting;

5. promoting transparency in all their operations;

6. pursuing balanced long-term returns that reflect the interests of clients, retail providers and end investors;

7. working together to develop common investor standards on inclusive finance.

Download the full text of the Principles for Investors in Inclusive Finance.

The PIIF Report on Progress 2016 is now available to download.

KEY CONTACT:  Kurt Morriesen


MEET THE INVESTMENT PRACTICES TEAM:

Kris Douma

Kris Douma

Director, Investment Practices and Engagements

See more on the  PRI Executive team

Tomi Nummela

Tomi Nummela

Associate Director, Investment Practices

See more on the  PRI Executive team

Catherine Chen

Catherine Chen, Senior Manager, Asset Owners

Catherine Chen joined the PRI in July 2017. She is responsible for asset owner work.

Prior to joining the PRI, Catherine spent ten years as a global equity investment analyst and emerging markets portfolio manager at BNP Paribas Asset Management (Paris), and in sales of equity and equity derivatives at BNP Paribas Investment banking (London). She previously spent six years as a sell-side equity analyst at Merrill Lynch (Singapore) and Credit Suisse (Hong Kong).

Catherine holds an MBA degree from Cass Business School and a masters in private equity from London Business School.


Justin Sloggett

Justin Sloggett, Head of Public Markets

Justin joined the PRI in June 2014. He oversees the Listed Equity and Fixed Income work streams.

Before starting at PRI, Justin had worked for the Co-operative Asset Management as a Responsible Investment Analyst, where he was responsible for ESG integration and worked closely with the investment research team and the portfolio managers. Justin has also worked for F&C Asset Management PLC as an Investment Support Analyst. 

Justin graduated from the University of Nottingham with a Masters degree in Mechanical Engineering and is a CFA® charterholder. 


Archie Beeching

Archie Beeching, Head of Real Assets

Archie joined the PRI in 2012. After five years leading PRI's Fixed Income Work Stream he now works with investors in real assets including real estate, infrastructure and natural resources.

Before joining the PRI, Archie worked for corporate sustainability consultant Net Balance (now EY Australia) and ESG research firm Regnan. In these roles, he was responsible for research and reporting on corporate governance and sustainability performance of ASX200 firms. Formerly Archie worked as an account director for a technology solutions provider. He holds a master's degree in Environmental Management from the University of New South Wales and a master's degree in Hispanic Studies from the University of Edinburgh.


Carmen Nuzzo

Carmen Nuzzo, Senior Consultant - Credit Ratings Initiative 

Carmen joined the PRI in April 2017. She leads the PRI's work on enhancing the transparent and systematic consideration of ESG factors in credit risk analysis and ratings. 

Carmen has over 16 years of experience in economic and market analysis research. She started her career at Salomon Brothers, subsequently working for Citigroup, Shareaction and Morgan Stanley. The focus of her latest research has been on Sustainable Economics, publishing in-depth thematic notes related to environmental and social issues, including health, inequality, gender diversity, climate change and the sharing economy. 

Carmen holds a Laurea (BA equivalent) in Political Science (major economics) from La Sapienza University in Rome and a Ph.D. in ‘Capital Markets and Business Finance’ from the University of Bergamo (including one year at the N.Y. University L.N. Stern School of Business, working, among other topics, on applications of the Ho-Lee model for the pricing of interest-rate contingent claims).


Kurt Morriesen

Kurt Morriesen, Senior Manager, Alternatives 

Kurt joined the PRI in August 2015. He is responsible for work on environmental & social themed investments projects and works with the Principles for Investors in Inclusive Finance (PIIF).

Prior to joining the PRI, Kurt worked for Eunomix, assisting mining companies in Southern Africa in redesigning corporate and sustainability strategies. He previously worked with the World Bank, International Finance Corporation (IFC) and the Inter-American Development Bank (IADB) on advisory and investment projects focusing on impact investing and public-private partnerships (PPPs).

Kurt holds an MBA from Hult International Business School, a master's degree in local development from Spain, a certificate on negotiations from Harvard University, a programme on public management from Argentina, and a bachelor's degree in Law from Brazil.


Natasha Buckley

Natasha Buckley, Senior Manager, Alternatives 

Natasha joined the PRI in August 2011. She is responsible for private equity work.

Before joining the responsible investment industry, Natasha held roles at UBS, the NHS and Simmons & Simmons (Paris).

Natasha has an MSc in International Relations from the London School of Economics and a BA in History from University College London. She has completed the University of Oxford Private Equity Programme at the Saïd Business School, under Professor Tim Jenkinson.


Marisol Hernandez

Marisol Hernandez, Manager, Alternatives 

Marisol Hernandez joined the PRI in May 2016 and is responsible for the hedge funds work.

Marisol has over 10 years of consultancy experience advising pension funds (public and corporate), local authorities, endowments and foundations in the allocation of large capital to alternative investments (hedge funds, private equity, real estate, infrastructure and structured products). She has experience building quant models, hedge funds databases and portfolio optimisation tools.

Marisol has an MSc in financial engineering, a BSc in industrial engineering, and is currently reading for a PhD in economics with a focus on responsible investment for institutional clients in alternative investments.


Anna Georgieva

Anna Georgieva, Manager, Public Markets 

Anna joined the PRI in November 2016. She manages the PRI’s fixed income work.

Anna was previously a senior analyst at Trucost (now S&P Global). She worked with financial institutions and corporate clients to deliver environmental data, insights, and tools for investment decision making, and to inform business decisions along the entire value chain.

In her role she worked closely on green bonds strategy and implementation. She was part of a team delivering the Natural Capital Protocol Food and Beverage Sector Guide on behalf of the Natural Capital Coalition. She has also co-authored a number of publications for organisations including the Economics of Ecosystems and Biodiversity (TEEB), the United Nations Environment Programme (UNEP), and the Clean Air Alliance of China (CAAC).

Anna holds a master’s degree in Environmental Technology from Imperial College London, specialising in Environmental Economics and Policy, as well as a BSc (Hons) in Business Administration from the University of Bath.


Hilkka Komulainen

Hilkka Komulainen, Manager, Infrastructure

Hilkka Komulainen joined the PRI in March 2016. She manages PRI’s Infrastructure work.

Prior to joining the PRI, Hilkka was a policy analyst at the Organisation for Economic Cooperation and Development (OECD), on topics including investment policy, responsible business and supply chain due diligence, climate change and infrastructure. She was previously a management consultant in the financial services and energy sectors in France, and worked at United Nations agencies in Denmark and Lebanon.

Hilkka has an MA in International Relations from the University of Edinburgh and a Masters in International Public Management from the Paris School of International Affairs at Sciences Po Paris.


Sean Allen

Sean Allen, Analyst

Sean joined the PRI in March 2017 working across asset classes to provide support to managers.  

Prior to this, Sean was a consultant at WSP. In this position, Sean supported and led on a range of environmental and sustainability projects, including international ESG due diligence projects, conflict minerals and supply chain projects, presenting at a conflict minerals conference, delivering sustainability training and undertaking environmental compliance, auditing and management system projects across various sectors. 


Sofia Bartholdy

Sofia Bartholdy, Analyst

Sofia joined the PRI in July 2017 as an analyst. She works across asset classes providing support to the managers. 

Before joining the PRI, Sofia completed two MScs, in Ecological Economics from the University of Edinburgh and in Applied Economics and Finance from Copenhagen Business School, specialising in responsible investment. While studying in Denmark, Sofia held part-time roles as an analyst with PwC Corporate Finance (M&A) and a business analyst with a small Copenhagen-based sustainability consultancy. 

Sofia also holds a BSc in International Business and Politics from Copenhagen Business School.


Jake Goodman

Jake Goodman, Analyst

Jake joined PRI in March 2017 as an analyst in the Investment Practices Team. He works across all asset classes providing support to the managers. 

Prior to joining PRI Jake worked as a consultant at Eco-Age, a boutique sustainability consultancy. He worked with clients in the mining, sports, jewellery and high fashion sectors on sustainability strategy and management, supply chain transparency, due diligence, reporting and engagement. He has also worked for Geomatics Group, the aerial survey arm of the Environment Agency. 

Jake has a BSc in Environmental Science from the University of Nottingham.