Mandate requirements and RfPs

To create a mandate with ESG requirements, asset owners will need to transfer investment strategy and allocation decisions into an RfP. This step is crucial to formulate expectations to trustees and potential investment managers.

To hear more about our work, contact us.

The PRI has created a raft of technical guides, divided into five modules set out below, to help asset owners develop a responsible investment strategy and requirements, and then select, appoint and monitor an investment manager accordingly. This page relates to Module 2: mandate requirements and RfPs.

MODULE 1

Strategy, policy and strategic asset allocation

■ Writing a policy
■ Defining a strategy
■ Developing an approach to strategic asset allocation

MODULE 2

Mandate requirements and RFPs

■ Developing mandate ESG requirements
■ Creating RFPs for manager search

MODULE 3

Manager selection

■ Longlist of managers
■ Shortlist of managers
■ In-depth due diligence

MODULE 4

Manager appointment

■ Embedding ESG requirements into legal documents
■ Sample model contracts

MODULE 5

Manager monitoring

■ Identifying minimum reporting disclosures
■ Considering asset class-specific reporting

Resources

Achieving climate commitments in multi-asset portfolios

2022-11-22T08:01:00+00:00

This report helps asset owners address the complexity of implementing a climate commitment across multi-asset portfolios.

Embedding ESG factors in investment mandates

2021-10-14T06:30:00+01:00

Investment mandates are a valuable and often underutilised tool for asset owners to signal ESG requirements to asset managers.

In 2012 the International Corporate Governance network published the model Mandate - a guidebook designed to help asset owners express what the expected of asset managers that they engaged and to reflect those expectations in mandates and IMAs.

To reflect some of the changes since 2012, the ICGN has published an updated version which covers new areas and topics. This 2022 report reflects new expectations of regulators, beneficiaries and other external stakeholders - as well as new work around the concept of fiduciary duty. Climate commitments, SDGs and ESG reporting are just some of the new topics covered - areas that are important parts of PRI’s work on selection, appointment and monitoring and - more specifically - investment mandates. Though some of the terminology is slightly different, we welcome this report.

PRI welcomes ICGN’s updated model mandate paper. We see it as an important contribution in helping asset owners to integrate environmental, social and governance issues into the core of the relationship with their investment managers – something that has been central to PRI’s work on the selection, appointment and monitoring of managers. Investment mandates provide a bedrock to this relationship so helping incorporate ESG into this foundation is an important step for asset owners with ambitions to develop a rigorous responsible investment policy. The report provides a set of practical tools and steps asset owners can use while negotiating and agreeing investment mandates but also during the duration of the mandate. We particularly welcome the draft clauses which owners, and their advisers, can use to strengthen mandates to ensure responsible investment ambitions are delivered. David Atkin CEO PRI

Podcast

Building ESG and sustainability outcomes into investment mandates

2021-12-14T11:13:00+00:00

In this episode of the PRI podcast, the PRI’s director of Investment Practices, Toby Belsom, speaks with Marcel Jeucken from Sustfin and Daniel Ingram from Wilshire, both co-authors of PRI’s recent discussion paper about ESG in Investment Mandates.

Webinar

PRI Digital Conference: Designing mandates for impact

2021-11-11T19:07:00+00:00

This session will explore some of the challenges and opportunities for both asset owners and investment consultants to take the next step in incorporating outcomes into the design of mandates.

This part of the PRI’s asset owner programme is currently under development. The PRI Asset Owner team is conducting guidance to help asset owners in the systematic incorporation of ESG factors. It is aimed to help asset owners defining and operationalising mandate ESG requirements prior to entering an investment manager relationship. It aims to fill the step of the investment chain following strategic asset allocation decisions and prior to the manager selection and appointment. We urge our signatories to reach out to assetowners@unpri.org to get involved and shape the outcome of this work.