How Responsible Investing Fits into our Manager Research Process

November 28, 2018

Integrating ESG rankings into manager research and selection

Our commitment to helping our clients meet their responsible investing objectives and social goals is reflected in our status as a UN-PRI signatory. This includes applying either our own or our clients’ ESG evaluation criteria when vetting managers and holdings to identify those dedicated to:

  • Investments with strong ESG rankings
  • Sustainability measures, such as green business, climate change and supporting minorities in the workplace
  • Investment opportunities that benefit social causes or communities, such as community development, low-income housing and faith-based groups

Incorporating ESG into the manager research process

Our rigorous manager research process includes a proprietary ESG ranking system, which forms the basis of our decision to hire a manager that fits our clients’ ESG needs. We consider 3 broad sets of factors in our evaluation:

  1. Profile: We analyze the extent of the manager’s sustainability practices in a broad sense, as well as their commitment to responsible investing
  2. Resources: We evaluate how well-resourced the manager is to achieve its responsible investing goals (the bridge between words and action)
  3. Practices: We assess how the manager actually implements responsible investing in its investment process. This is designed to distinguish responsible investing from “greenwashing,” or presenting false integration of responsible investing practices to attract clients

More specifically, each manager receives multiple scores based on their involvement in promoting sustainable investing, based on the following criteria:

  • How the manager handles ESG-related risk and ensures compliance with its ESG policy
  • Overall experience with regard to managing ESG-integrated portfolios
  • Level of ESG personnel
  • Whether the manager generates its ESG-related research internally or relies solely on third-party data providers
  • How the manager incorporates ESG at the fundamental analysis level
  • Whether the manager engages with companies and management on sustainability
  • Whether the manager makes ESG-related reporting available to clients 
  • How much ESG factors influence investment decisions
  • What plans, if any, the manager has to enhance its ESG efforts over the next three to five years

Find out more about our manager research process and our manager research services.

More about UN-PRI

The United Nations-supported Principles for Responsible Investment (PRI) is a growing initiative consisting of international investors that work together on ESG issues, such as human-rights campaigns, environmental concerns, employee diversity and anti-corruption efforts.
As a signatory for The Principles for Responsible Investment, SEI has publicly committed to follow six voluntary guiding principles meant to help incorporate ESG risks into portfolio management and corporate practice. These Principles include:

  • Incorporating ESG issues into investment analysis and decision-making processes
  • Integrating ESG issues into ownership policies and practices
  • Seeking appropriate disclosure on ESG issues by the entities in which firms invest
  • Promoting acceptance and implementation of the Principles within the investment industry
  • Working together to enhance effectiveness in applying the Principles
  • Reporting on activities and progress towards implementing the Principles

Legal Note

Important Information: This material is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company. The material included herein is based on the views of SIMC. Statements that are not factual in nature, including opinions, projections and estimates, assume certain economic conditions and industry developments and constitute only current opinions that are subject to change without notice. Nothing herein is intended to be a forecast of future events, or a guarantee of future results. This presentation should not be relied upon by the reader as research or investment advice (unless SIMC has otherwise separately entered into a written agreement for the provision of investment advice).

There are risks involved with investing including loss of principal. There is no assurance that the objectives of any strategy or fund will be achieved or will be successful. No investment strategy, including diversification, can protect against market risk or loss. Past performance does not guarantee future results.