One of the world’s leading fund management companies has broken new ground by inserting an SRI clause into all its investment management contracts, regardless of whether clients have asked for such factors to be considered.
Aviva Investors claims the decision, which took effect from the middle of last month, is a first for a mainstream fund manager and will ensure that SRI issues become more integrated into its overall asset management.
Aviva Investors, the global asset management business of Aviva, the world’s fifth-largest insurance group, was created in September by the integration of the group’s fund management companies, including Morley in the UK, Aviva Capital Management in North America, and Portfolio Partners in Australia.
As well as managing Aviva’s assets, it acts as investment manager for various institutional and retail funds. External clients account for around a third of the €300billion ($375bn, £250bn) under its management, with €1.5bn of that total under specific SRI management.
The clause says Aviva Investors ‘wishes to act in the best long-term interests of its beneficiaries and believes that environmental, social, and corporate governance issues may affect the performance of investment portfolios’. It goes on to inform clients that it has signed the United Nations Principles for Responsible Investment, which encourage the integration of such issues into investment analysis – and that Aviva Investors intends to ‘remain an active and engaged member of the PRI’.
Aviva Investors told EP that clients could insist on removal of the clause, but added: ‘The point of it is to lay down what we are expecting to do and what we want our clients to agree to.’
Steve Waygood, head of SRI engagement, argued it would be unlikely that any client would object, partly because the clause ‘represents an enhancement to client disclosure that helps govern the contract with us at no additional cost to them’.
The move was generally welcomed by other investors at last month’s annual Triple Bottom Line Investment conference in Amsterdam, where it was announced. Vincent van Assem, head of sustainable development at the Dutch bank ABN Amro, told EP: ‘It’s an important step that will, if nothing else, create more awareness among Aviva Investors’ clients. The fact that they’re doing it globally and for all their investors sends out a strong message, and I think it’s a step that ought to be applauded.’
Van Assem suggested others may follow, although he could not comment on whether ABN Amro might be one of them.
Aviva Investors is also to broaden its approach to voting on corporate responsibility issues at the annual meetings of companies by doing so with all its global holdings on the MSCI world index.
Until now it has done so only at the annual meetings of FTSE 350 and Eurofirst 300 holdings. In addition, it will begin to lobby the listing authorities of global stock markets to explore whether they include the UN Global Compact principles in their listing requirements.