UK managers dominate European responsible investment league table

Schroders, Robeco Group, Aviva Investors, Amundi and Standard Life Investments have been named the most responsible investment managers in Europe, a new report by pressure group ShareAction.

BBVA Asset Management comes bottom in the list, with Deutsche Bank coming in the bottom five.

The report shows UK asset managers are leading their European counterparts in responsible investment management, with four of the top six fund houses based in the UK.

The research ranks the responsible investment performance of the 40 largest fund managers in Europe, all but one of which are signatories to the UN-sponsored Principles for Responsible Investment (PRI), and which together invest £18trn of assets.

Asset managers have been assessed on their transparency, including the accessibility of information about voting and engagement with investee companies, conflicts of interest policies, and disclosure of investment fees and charges. All the managers were also sent a questionnaire allowing them to explain in more detail how their investment process incorporates environmental, social and governance factors that are relevant to investment performance. A total of 31 out of 40 managers completed the questionnaire. Santander Asset Management, which is the only manager in the survey not to be a signatory to PRI, came lowest out of the 31 firms that completed the questionnaire.

The survey included questions on measuring the tangible impact of European asset managers’ investment decisions including their stewardship work.

Only two asset managers – Natixis and Robeco – provide comprehensive detail on the carbon impacts of their investments. ShareAction says most of the top ranked managers seem to be aware of the need for a clearer demonstration of the added-value of their activities and of the asset management sector as a whole.

Only 8 asset managers provided a full list of companies engaged with over the year, while just 7 go beyond the minimum legal requirements, and even attempt to provide additional explanations of potential direct or indirect fees and charges on their website. Seven of the asset managers do not include any information at all on environmental and/or social impacts within regular reporting to clients or publicly

ShareAction chief executive Catherine Howarth says: “The leaders in this year’s report should be applauded for their stewardship of client assets as well as for the quality of information disclosed on investment costs, handling of conflicts of interest, and real-world impacts of responsible investment practice. Transparency in the asset management sector is critical to restoring public trust in an industry that invests the savings of millions of European citizens. Our research exposes a huge gulf in performance between the best and worst firms. This places a big responsibility on pension funds and other institutional clients to undertake rigorous due diligence on the factors assessed in this survey, all of which have a bearing on the interests of beneficiaries such as pension savers. We hope this report will stimulate speedy improvement in the performance of poorly ranked firms, and we have provided individual recommendations for each of the 40 asset managers to help achieve that outcome.”

Association of Member Nominated Trustees co-chair and trustee of BECTU Staff Retirement Scheme Janice Turner says: “As pension scheme trustees, it is invaluable to have this analysis at our disposal. The information in ShareAction’s report empowers us to have better informed conversations with asset managers about issues that make a real difference to long-term fund performance and to our members’ well-being in retirement.”