One of the world’s biggest investment management consultancies has taken the unusual step of providing its portfolio managers with a detailed database on 1800 companies’ social and environmental performance.
Paris-based Axa Investment Managers has put the Responsible Investment Search (‘RI Search’) facility on to computer desktops, making it available at the click of a mouse. The idea is for the information to be as accessible as the mainstream data that portfolio managers use in similar format every day.
Axa IM, which manages €485billion ($639bn, £437bn) of assets and has 3100 employees in 22 countries, has taken a year to develop the system. It can be searched in any number of ways by Axa IM’s 20 or so portfolio managers, who are responsible for making investment decisions.
Raj Thamotheram, Axa IM’s responsible investment director, told EP: ‘We buy in a lot of data from people like Innovest and Vigeo, then clean it up and merge it so that the portfolio managers will be able to access an environmental, social and governance snapshot of a company in relation to time, peer group and country.’
Thamotheram said the data must be especially ‘user-friendly’ to persuade managers to use it. ‘These people don’t read huge reports, so the information has to be really shrunk down, and if they’re really interested in certain aspects they can drill down further. It’s been designed on the basis of what portfolio managers want, as opposed to where a lot of SRI stuff starts off, which is what people want to tell them.
It also has to be kept very up to date – otherwise they won’t look at it.’
The database is part of Axa IM’s ‘Responsible Investment Inside’ strategy, led by a team of three and aimed at integrating SRI considerations into mainstream investing. The company has been contacting client investors that have endorsed the United Nations Principles for Responsible Investment, hoping they will encourage portfolio managers to take more account of social and environmental indicators.
‘I can’t say every portfolio manager uses the new system all the time, but unless they have it on their desktop in a way that’s as easy to access as all the other data then they’re not going to integrate,’ said Thamotheram. ‘There’s no guarantee they will, but it’s impossible without.
Axa IM says it has had no pushback from portfolio managers yet, but has been working initially with those it knows or believes to be interested in responsible investment, and will monitor how the system is used. ‘If one team uses it a lot more than others, and with benefits, then we believe things will start to get interesting, as there is a competitiveness between them,’ said Thamotheram.
Axa IM believes its system is unique. ‘It’s always dangerous to say something is a first, but we’ve not heard of anything like it,’ said Thamotheram.