UK - The trend of cutting dedicated SRI research is 'short-sighted' and 'counterproductive', FairPensions says.
FairPensions director of campaigns Duncan Exley called the trend to cutting dedicated SRI research 'short-sighted' and 'counterproductive'.
Speaking to Global Pensions he said: "Cuts in SRI teams don't necessarily mean it has been downgraded but the degree to which we've seen them being removed is a strange and counterproductive move for clients and investment managers."
He added: "It can be in their short term interest but if [asset managers] want to retain their reputations of custodians they need to act in a long term manner."
This comes as Responsible Investor reported Merrill Lynch senior director of SRI research Zoe Knight had been made redundant and would not be replaced.
Merrill Lynch told Global Pensions it could not confirm specific details of personnel or structural changes to the business but said some 30,000 to 35,000 positions would be removed across Merrill Lynch and its owner, Bank of America over the next three years, through a variety of divisions.
In recent months, several major investment managers have announced closures or cuts to their dedicated SRI research divisions, with JPMorgan closing its specific ESG service while Citigroup has made cuts to its team (Globalpensions.com; 15 December 2008).
Despite this, other asset management firms have reiterated their commitment to the sector.
Henderson Global Investors head of SRI funds George Latham told Global Pensions the company had recently launched an SRI-based US mutual fund and was looking at opportunities in Europe.
He said: "As a business we have a strong team and see market growth opportunities. We're not blind to what's been happening in the world, but we still see demand. It's a tough market environment but we're looking to remain committed in this area and taking advantage of opportunities."
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PP has compiled a list of what to watch out for over the coming months.
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