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Investors In Top 3 SRI Managers

AMP Henderson Global Investors In Top 3 SRI Managers

AMP Henderson Global Investors has just been ranked as one of the world’s top three Socially Responsible Investment (SRI) managers in a new report commissioned by MISTRA, the Stockholm-based Foundation for Strategic Environmental Research.

The government-sponsored report examined best practice globally in SRI management, as well as reviewing the financial impact of SRI. The report covered 142 SRI products from 77 European and US funds managers.

“We’re delighted with the report’s results because the methodology and approach rated by MISTRA is identical to that used in the SRI products AMP Henderson recently launched in New Zealand,” said Simon Urquhart-Hay, head of distribution.

“Henderson Global Investors has been successfully running SRI products out of the UK for over 20 years, so when we launched our range of SRI products in the New Zealand market we had some very strong foundations to call on.”

AMP Henderson was the first fund manager to launch SRI open ended investment companies in New Zealand, launching them in 2000. Globally, AMP Henderson manage $3.6 billion in SRI funds.

The MISTRA analysis was conducted in partnership with the Swedish consultancy firm Miljoeke AB, and SustainAbility, a London and New York-based firm which specialises in business strategy and sustainable development.

The researchers defined six best-practice characteristics for SRI:
 triple-bottom-line approach (environmental, social and financial performance);
 focus on best-in-class, and “pioneers/innovators”;
 evaluation of sustainability opportunities and sustainability risks;
 an ‘intelligent’ screening model combining qualitative and quantitative analysis;
 a qualified research team, and
 openness and transparency in screening procedures.

The study found Henderson Global Investors, Norway-based Storebrand Asset Management and Trillium Asset Management in the US to be the very best SRI managers out of the 77 involved in the study.

MISTRA engaged accountancy firm KPMG to review academic literature to determine the financial impact of applying SRI criteria to investment funds. The study concluded, “financial returns and risk levels are not affected negatively by adding SRI criteria”.

“In the 18 months since we launched the Henderson Ethical Fund in New Zealand there has been huge awareness growth regarding SRI, both at a retail and a wholesale level.”

“We are fielding a large number of inquiries from clients regarding SRI at the moment. We are confident SRI will experience rapid growth in New Zealand during the next five years, particularly with charitable organisations.”

AMP Henderson Global Investors offers investment products using their SRI methodology in New Zealand, Australia, Hong Kong, UK and Europe.

-Ends-

SRI Background

SRI funds are designed for investors seeking more than investment performance. The funds also seek to actively address social and/or environmental issues in their mandate.

The social focus of SRI Funds dates back for almost a century, with its roots in the church investments. These funds often had particular exclusions including on areas of high social impact such as gambling, armaments and alcohol.

Further specific global social issues helped further drive investors’ interest. In the 1970’s SRI funds emerged with mandates to not benefit from the Vietnam War. Then in the 1980’s opposition to apartheid South Africa fuelled further SRI investment in the UK and the US.

In the late 80’s in particular, with concerns over the environment, specialist “green” funds came to the forefront. Soon there were environment focused funds, which invested favouring companies which were adopting a more sustainable approach in their corporate strategy and behaviour. Broader social and environmental values and concerns remain relevant today.


SRI Market Information (Sourced from UBS Warburg)

Internationally, SRI is experiencing rapid growth. According to the Social Investment Forum and the Conference Board, from 1997 to 1999 assets in all segments of social investing – screened portfolios, shareholder advocacy, and community investing – grew 82% to US$2.16 trillion, representing about 13% of the US$16.3 trillion under professional management in the US. By way of comparison, that 82% growth rate of socially responsible investing is about twice the growth rate of all assets under management in the US.

This trend is not confined to the US. As Russell Sparkes reported in the June 2000 issue of Professional Investor, the universe of retail ethical funds doubled in size every three years in the UK during the 1990s, from £321m in 1990 to £3.197bn in 1999. According to the Financial Times, SEB Invest, which started Germany's first ethical fund in 1998, saw inflows from retail and institutional investors rise 10-fold last year, despite the market downturn.

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