LONDON — Some of Europe's most prominent pension fund and money managers are heeding the call made nearly a year ago when the United Nations launched its Principles for Responsible Investment.
Some funds are hiring additional staff to boost oversight of their portfolios, while others are hiring asset managers or third-party specialist firms specifically for their experience in considering environmental, social and governance issues as part of their investment decisions.
Asset managers are responding by increasing resources devoted to these issues,, sometimes by hiring prominent experts in the field.
"I've been very encouraged indeed," said Colin Melvin, director of corporate governance at Hermes Asset Management, London. "The U.N. principles have had a very significant impact, leading many of the world's largest funds to reconsider their approach. They're bringing additional resources and new activities, which is beneficial to us all really."
Pension fund executives said in most cases a foundation for responsible investing had already been established prior to the launch of the U.N. principles. However, the principles served as a catalyst to push the agenda at a faster pace.
The €81 billion ($105 billion) Stichting Pensioenfonds PGGM, Zeist, Netherlands, has been among those leading the charge with the appointment of Marcel Jeucken as head of responsible investment in 2006. With a team of three and expanding to five this year, the aim is for better integration of environmental, social and governance principles into the fund's decision-making process among internal and external managers.
"One of the steps we've taken is to include ESG questions in our RFPs," Mr. Jeucken said in an interview. "We're asking how they can integrate certain issues into the investment process. The idea is to stimulate external asset managers to think about ESG issues and integrate them into the investment process."
Mr. Jeucken said the manager selection process is complex and declined to specify how the information is used to select managers. However, he added: "We don't ask questions just for fun. We are specifically looking at these issues and finding ways to integrate them into our assessment framework."