The Principles for Responsible Investment (PRI) focus on the role of financial markets in sustainable development. They were developed by international investors under the auspices of the United Nations Secretary General.
"By incorporating environmental, social and governance criteria into their investment decision making and ownership practices, the signatories to the principles are directly influencing companies to improve performance in these areas," explains UN Secretary General Ban Ki-moon on the PRI website.
RCM signs Principles for Responsible Investment
Supporting our clients through responsible investing
According to Bozena Jankowska, Head of Sustainability Research at RCM, there is growing demand from both existing and potential clients to account for ESG issues in the investment process. "The PRI are an excellent way for RCM to express our commitment. In fact, we are seeing a growing number of institutional investors asking specifically for a PRI-affiliation when searching for a fund manager to manage their pension funds," Jankowska says.
The signatories follow the principles on a voluntary basis. But given that the RCM Sustainability Research team has been around for the last seven years, it is clear that RCM is serious about supporting clients who recognize the potential upside in factoring in environmental, social and governance factors in the broader investment decision-making process. Jankowska: "Working in the best interests of our clients means taking into account emerging global trends and actively integrating the opportunities afforded by and the risks associated with these trends."
Bozena Jankowska: "The PRI are an excellent way for RCM to express our commitment"
RCM’s existing expertise
For RCM’s daily operations, this means that sector analysis and individual company research includes ESG issues where they are material. "The RCM Sustainability Research team shares sustainability ratings, sector analysis, thematic observations, and individual company research with fundamental analysts and fund managers with a view to incorporating ESG into investment analysis" explains Sustainability Research Analyst Barbara Evans.
Considering environmental and social factors alongside mainstream company analysis identifies risks and opportunities that as yet have not been fully priced by the markets. Evans: "Climate change is a good example of how an issue typically seen to have a niche interest among Socially Responsible investors two or three years ago now has a mainstream focus. RCM’s Sustainability Research Team has been following related policy and legislative changes over the last seven years, highlighting how climate change might come to have a material impact on the companies we invest in. Now we see a price for carbon driven by cap and trade schemes such as the EU Emissions Trading Scheme, an associated revaluation of companies impacted by these new market mechanisms, and a variety of emerging industries helping to reduce our reliance on fossil fuels."
An active role in encouraging responsible performance
Although corporate engagement isn’t an explicit strategy for RCM, meeting with companies is regarded as a fundamental part of the research process in order to better understand long-term strategy and to seek evidence of performance on ESG issues. "By meeting with companies we can also provide our views to management on how they are performing in comparison with their peers and what we believe to be best practice on ESG management in their sector" says Evans.
Evans also highlights that RCM employs a proxy-voting agency and have existing proxy-voting guidelines which make reference to ESG standards. In addition to this, the expertise of the Sustainability Research team are called upon when resolutions on ESG issues are raised at company Annual General Meetings. Thus RCM can ensure that it is voting in the best interests of its clients.
Barbara Evans: "We provide companies with our views on ESG performance and best practice"
About RCM
RCM was founded in 1970 as a boutique equity asset manager and is today a global investment organization with offices in key financial centers around the world including Tokyo, San Francisco, London, Frankfurt, Hong Kong, and Sydney. RCM is a company of Allianz Global Investors, one of the world's leading asset managers, and continues to adhere to the same philosophy and investment style upon which the firm was founded.
Over the last seven years, RCM has assumed a pioneer role within the Allianz Group regarding sustainable investment. RCM is a founding member of the Enhanced Analytics Initiative and an active member of the UNEP FI (United Nations Environment Program Finance Initiative) Asset Managers Working Group. RCM was also a signatory to the first Carbon Disclosure Project, before passing responsibility for carbon disclosure to Allianz SE. Allianz SE has been a signatory of the UN Global Compact since 2002.
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