28 Sep 2020
We launched the SRI rating in 2012 – the first of its kind in the UK – and we’ve been very active in the socially responsible area of our industry ever since. We’ve grown our rated list and expanded our range to meet the increasing demand from advisers for solutions across differing risk categories.
‘The interest in responsible investing has increased significantly in the last eighteen months as both regulation and customer enquiries have generated a new demand for information. RSMR has been reviewing its approach and our re-launch takes place at an exciting time for the whole sector. We are keen to make sure we maintain our lead in providing high quality research and have built a new framework which will allow us to deliver a clearer understanding of the options available for advisers.’ Ken Rayner, Director, RSMR
Over time, a variety of acronyms have been used to cover the changing face of products and with no real consensus on formal definitions, it’s created confusion around the different approaches.
The Investment Association Responsible Investment framework has set out guidance, providing structure for advisers and asset managers. We’re tracking and mirroring the changes that are taking place within the industry, and to provide further clarity to the funds we rate, we’re rebranding our SRI rated funds as ‘Responsible’. Adapting our research and aligning ourselves with the evolution of the industry means that we’re able to assist advisers in achieving more mindful client conversations.
Environmental, Social and Governance (ESG) issues have become an increasingly important part of the fund management industry (and are an integral part of the due diligence process we use when rating a fund). Going forward, we see ESG as playing a key part in the risk management and investment process of all funds we rate, but additional criteria will need to be met to achieve a Responsible Rating.
RSMR Responsible rated funds apply multiple criteria into their process and fall into four distinct categories:
- Sustainable: funds that select and include investments that responsibly contribute and benefit the global sustainable economy. This may include referencing the portfolio to one or more of the UN Sustainable Development Goals (SDGs) or the application of a screen.
- Impact: funds that can demonstrate that they are aligned to the Global Impact Investing Networks definition of Impact. ‘Investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.’
- Thematic: funds that use macro themes to identify long term responsible structural growth trends.
- Ethical: funds that apply a screen, either positive, negative or both, that may be based on ethics or on a ‘best in sector’ approach. Each fund will have its own defined screen and may vary between provider.
These changes are also reflected in our MPS offerings and our three SRI Managed Portfolios will be renamed Responsible Cautious, Responsible Balanced and Responsible Dynamic. Our investment process will be just as rigorous, with all three portfolios constructed predominantly from RSMR Responsible rated funds.
The demand for responsible investing is growing day by day and with our continual research, analysis and forward-looking perspective, we’ll stay at the forefront of this dynamic area of the market.
To find out more about our Responsible rating, portfolios and framework check out our Managed Portfolio Service.