UK - Fund managers believe that trustees have little interest in socially responsible investments (SRI), claiming that those that do invest in them are "primarily interested in protecting their own reputations and deflecting criticism".
Deloitte & Touche’s latest SRI survey found that whilst fund managers believe that SRI is a growth industry, the majority believe that pension fund trustees have taken them up simply to pre-empt any criticism from either the Government or other pressure groups.
Of the 65 asset managers D&T surveyed, 48% of the respondents had come to the conclusion that SRI was a useful smokescreen for trustees, whilst 18% had no opinion on the matter. Asset managers’ interest in SRI is primarily client driven, albeit driven by clients with non-ethical concerns in mind, according to the survey.
Asset managers also named the Myners Report - and its reference to increasing corporate activism amongst fund managers - and competitor activity as the other important factors influencing SRI growth.
Despite over 70% of the firm’s surveyed anticipating an increase in client interest in SRI over the next 12 months, just over half of them maintain that SRI will remain a “niche segment” of the market, catering for a minority of investors with particular ethical values, through relatively small specialist funds.
Aside from whether or not client demand will continue to rise, the one of the biggest problems facing the SRI cause is a lack of available talent, with 19% of firms claiming that a lack of expertise was hindering take up. According to D&T, this shortage is compounded by the lack of new blood in the talent pool, a shortage “reinforced by the tendency for SRI experts and even teams to be head-hunted by competing funds”.
Chris Burgess, leader of environmental and sustainability services at D&T, said: Fund managers will only take SRI beyond its niche position when there is sufficient client demand. It may take further action by the Government and other stakeholder groups to generate such demand.
By Geoffrey Ho
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