Integrating ESG factors in investment decision-making

Over the years, the Office of Investment Management (OIM) built a comprehensive framework for its sustainable activities, based on the conviction that embracing sustainable investment opportunities and mitigating against environmental, social and governance (ESG) risks leads to better long-term risk-adjusted performance. OIM invested in the first green bonds in 2008 issued by the World Bank and was the catalyst investor in Low Carbon Exchange Traded Funds in 2014.

Our Sustainable Investment Framework sets out how we do this across asset classes, including the way in which we select and monitor asset managers.

We are founding signatories of the Principles for Responsible Investments (PRI) since 2006

Named most Responsible Asset Allocator by the Responsible Asset Allocator Initiative since 2017

Integrating ESG across our public equities and fixed income portfolios

The Fund integrates ESG factors into its investment analysis and decision-making process, across all asset classes. This means that ESG considerations are considered alongside traditional financial metrics when evaluating investment opportunities.

Access to ESG data and information

Sustainable Investment team leverages data from industry leading providers.

These include:

MSCI ESG Manager
RepRisk

Development of a proprietary ESG database

ESG database made available to all investment teams.

Simultaneous access to fundamental and ESG data for holistic investment decision making.

Integration of ESG factors into investment analysis

ESG database completed with additional industry leading framework such as SASB for materiality assessment where relevant.

Investment officers use ESG data and analysis to incorporate relevant factors in investment thesis, identifying areas of engagement, position sizing.

External Managers

OIM conducts ESG due diligence on external managers, for both private and public markets to ensure the Fund's ESG approach is consistent across its entire investment portfolio.

Key aspects of OIM’s ESG due diligence process for external managers:

Pre-investment

ESG Due diligence questionnaire

OIM requires all potential external managers to complete a detailed ESG questionnaire, which covers a range of topics related to their ESG policies, climate, and net zero commitments.

This questionnaire helps to assess the manager's commitment to ESG principles and to identify any potential ESG risks or issues.

Pre-investment

ESG Performance Scoring

Use of proprietary ESG scoring system to evaluate the ESG performance of external managers.

Scoring system considers a range of factors, including the manager's ESG policies and procedures, as well as their track record in implementing ESG practices, climate targets and engaging with companies on ESG issues.

Post-investment

Ongoing monitoring

The sustainable investment team continuously monitors the ESG performance of external managers through a follow up questionnaire and ad hoc meetings.

This ensures external managers are meeting our ESG standards and any potential ESG risks or issues are identified and addressed in a timely manner.

While managers are not required to be PRI signatories or members of industry associations, this is a core part of our ongoing engagement and conversations with them.