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Corporate Social Responsibility

At RaboDirect we aim to give our clients good financial and social returns, that's why we're making Responsible Investing an integral part of our business model. We know our customers feel safe with us because of our financial strength, but as conscience grows in consideration for investors we think it's important to embrace the industry recognised principles that make our business more accountable when it comes to social responsibility.

Corporate Social Responsibility (CSR) information about companies has become a lot more transparent recently and is now available in the most typical analysis of investment products and services. Exercising the voting rights on behalf of smaller shareholders and more resolution-focused dialogue with companies around environmental, social and corporate governance issues, has fortunately, become much more achievable too.

Responsible investing is still strongly associated with sustainable funds. These funds are still considered very niche and are made up of negative selection (exclusions) and positive selection (best-in-class ratings and theme funds) of primary shares. But it's much more than that and RaboDirect believe the UN Principles for Responsible Investment provides a good framework for helping investors get a better understanding of the social implications that their investment decisions have and encourage them to consider them more.

Background

In early 2005 the then UN Secretary-General, Kofi Annan, invited a group of the world's largest institutional investors to join a process to develop the Principles for Responsible Investment (PRI). Individuals representing 20 institutional investors from 12 countries agreed to participate in the Investor Group. They were supported by a 70-person multi-stakeholder group of experts from the investment industry, intergovernmental and governmental organizations, civil society and academia. The process was coordinated by the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact. The six Principles were launched in April 2006 at the New York Stock Exchange by the UN Secretary-General.

UN Principles for Responsible Investment

Principles For Responsible Investment

The UN PRI consists of six principles which are accompanied by a set of possible actions that institutional investors and asset managers can take to integrate Enviromental, social and corporate governance issues (ESG) considerations into their investment activities. The actions relate to a variety of issues, including investment decision-making, active ownership, transparency, collaboration and the achievement of wider support for these practices from institutional investors. It reflects the core values of investors whose portfolios are often highly diversified. The PRI's six principles require institutional investors to sign up to the following promises:  

  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the Principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the Principles.
  6. We will each report on our activities and progress towards implementing the Principles.

To find out more about the UN principles for Investment please click here.

Six of the eight fund managers on our platform have signed up the UN Principles for Responsible Investing, they are:

Fidelity Investment Managers and Merrion Investment Managers have their own standards. You can read them below.

Fidelity Investment Managers

Fidelity believe that high standards of corporate social responsibility (CSR) will generally make good business sense and have the potential to protect and enhance investment returns. Consequently, our investment process takes social, environmental and ethical issues into account when, in our view, these have a material impact on either investment risk or return.

Social, environmental and ethical best practice should be encouraged provided it enhances long term financial return. We do not screen out companies from our investment universe purely on the grounds of poor social, environmental or ethical performance but rather adopt a positive engagement approach whereby we discuss these issues with the management of the companies in which we invest on behalf of our clients.

We use the information gathered during these meetings both to inform our investment decisions and also to encourage company management to improve procedures and attitudes. We strongly believe that this is the most effective way to improve the attitude of business towards CSR.

FIL's CSR analyst has overall charge for analysing the environmental, social and ethical performance of the companies we invest in. The CSR analyst works with FIL's equity analysts and portfolio managers to highlight any material risks or potential business opportunities so that they may be properly considered within our investment process.

Merrion Fund Managers

Merrion Investment Managers' ethical principles have long been at the heart of our business since its formation in 1986 and we believe this long running commitment to corporate social responsibility (CSR) differentiates our business from others.

We see CSR as a part of good corporate governance and as such it is woven into the way we run our business. MIM's fund managers have the responsibility to exercise voting rights during general meetings to reflect the MIM clients' interests. In addition, voting is an important part of the dialogue between a company and its shareholders.

This dialogue is key for long-term wealth creation. MIM's investment team are in constant contact with the boards of companies in which they invest to ensure that companies strive to meet high standards expected of them and that they are accountable to their shareholders.

To explain this, MIM has set of corporate social responsibility aims:

  • We take seriously the obligations of corporations towards their employees.
  • We encourage companies to support their employees to do their part to make a better world.
  • We encourage commitment to CSR with regards staff, customers, business partners and the communities in which they operate.

We value the principles of accountability, honesty and integrity in all aspects of our business. Our policy is to conduct our business in a manner which ensures:

  • Fair treatment of all employees and clients.
  • Transparency of our business policies and practices.
  • High standards in all matters relating to health, safety and the environment.
  • Ethical business practices throughout our operations.

We recognise that the involvement of our employees is key to the future success of the business and we have for many years adopted a policy of keeping employees fully informed on all matters affecting them. We have consistently operated a remuneration strategy that recognises both corporate and individual performance. We are also committed to best practice in employment matters, recognising the role this plays in attracting and retaining staff.

To succeed in delivering the best possible service to our clients, every employee is expected to adhere to the group's core values and to uphold them in the workplace. Employees are expected at all times, to exercise the highest ethical judgement and comply with laws applicable to their duties.