The Responsible Investment Update, our global review, highlights important new resources and reports on how investors are approaching environmental, social and corporate governance (ESG) considerations. As the winner of the prestigious GLOBE 2007 Capital Markets Award for Sustainable Investment and Banking, Mercer's investment consulting work in this area has been recognised.

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Responsible Investment – Not a Religious Experience: What are the differences between Responsible Investment and ethical or socially responsible investing? Mercer addresses some common misconceptions and describes the evolution of the Responsible Investment industry.

Building a Responsible Investment portfolio: What kinds of options are available for investors looking to implement a Responsible Investment strategy? In this article, Mercer explores the institutional-quality market landscape. 

Case Study – Responsible Investment in Japan: What does Responsible Investment look like in action? This article describes how a Japanese corporate pension fund chose to implement an RI strategy focused on environmental, social and governance themes.

The UK “Shareholder Spring” – a single season or lasting trend? Following a particularly active General Meeting season for corporations around the world, Mercer ponders solutions for improving the quality of engagement between investee companies, investment managers and asset owners.

And check out this recent news from Mercer:

• Mercer to research ways corporations can build long-term shareholder loyalty: Mercer, Stikeman Elliot LLP, and the Generation Foundation have launched a collaborative global research project exploring the concept of “loyalty shares” and related instruments. Interested parties are encouraged to participate in the consultation process

 Go to Issue 22 

Opportunities in sustainability: With the world’s largest asset owners ramping up their allocations to sustainability themed investments, Mercer discusses related global policies, the risks, and the increasingly available investment opportunities.

A role for debt capital markets in addressing climate change risks: Mercer discusses how Green Bonds can fit into a well-diversified bond portfolio and act as a ‘hedge’ against sustainability risks.

Carbon risk – Today, tomorrow and the future: Following the Australian Government’s implementation of a carbon tax, Mercer explores systematic, sector and security level risks and opportunities related to climate change.

Doing your homework: Higher education endowments & investment sustainability: Schools are increasingly becoming aware of sustainability as it relates to course work, campus operations, and investment decisions. This article discusses current trends, related challenges for administrators, and ideas for integrating ESG factors into the endowment investment process.

Insurance and Responsible Investment: The recently launched Principles for Sustainable Insurance represent growing awareness of sustainability challenges facing the insurance industry. In this article, we explore some ESG risks, review the Principles, and discuss some related actions for insurers.

Aled Jones named Head of Responsible Investment for EMEA: As the new head of RI for Europe, Middle East and Africa, Aled looks forward to the challenges ahead

 Go to Issue 21 

Report Launch: Through the Looking Glass. This new follow up report discusses actions that the investor partners involved with the 2011 study are taking or planning based on the findings.

Durban Blues – With a Hint of Green. Although Durban gave some the blues, closer examination of the 2011 UN Climate Change Conference unveils more than a hint of “green.” In this article, Mercer discusses some outcomes from the talks, challenges in tackling climate change and their implications, and key issues for investors.

ESG Ratings Update – 5,000 and Counting. As our global, cross-asset class pool of ESG rated strategies grows past the 5,000 mark, Mercer takes inventory of the research and discusses some leading examples and challenges in moving ESG analysis forward.

Stewardship Responsibilities on Executive Pay – Recent Developments in the UK. Stewardship responsibilities are once again on the agenda in the UK as the government proposes major reforms to executive compensation policies. In this article, we discuss the recent UK government consultation on executive pay, including Mercer’s response and where things are headed from here.

What Happens After You Sign the PRI? So, you’ve signed onto the UN Principles for Responsible Investment. What now? Mercer discusses first steps for signatories, along with considerations for new signatories in developing internal structure, capabilities, and reporting around the commitment.

 Go to Issue 20

Aled Jones Joins Mercer’s Responsible Investment Team. Jane Ambachtsheer welcomes Aled Jones to the team and discusses what he is looking forward to working on in his new role.

Stewardship Codes – An Emerging Global Phenomenon. In addition to the UK Stewardship Code, principle-based codes have been developed in a number of countries around the world.

Mercer Launches New Stewardship Services. Mercer has developed a suite of services to help clients with their new responsibilities under various UK and European stewardship codes.

Opportunities for Sustainable and Responsible Investing in US DC Plans. In a recent joint study, the US SIF foundation and Mercer found that the number of defined contribution plans in the US offering a sustainable and responsible investing choice could double in the next two to three years.

International Codes and Conventions – Are Pension Funds Missing in Action?The process around creating, ratifying, and implementing norms, codes, and conventions (such as the UN Global Compact and the Convention on Cluster Munitions) typically involves corporations, governments, and non-governmental organizations, but not investors.

Proposed ESG Disclosure Requirement in Ontario. The Ontario government recently proposed that pension plans registered under the Pension Benefits Act be required to disclose if their Statements of Investment Policies and Procedures address ESG factors.

Institutional Share Voting in Australia. The Australian Institute of Company Directors (AICD) recently commissioned Mercer to map the institutional share voting process from end-to-end.

 Go to Issue 19

Jane Ambachtsheer: Honorary Recipient of the SIO Lifetime Achievement Award. Jane Ambachtsheer, Partner and Global Head of Mercer's Responsible Investment business, has been chosen as the honorary recipient of the Social Investment Organization's 2011 Canadian SRI Lifetime Achievement Award.
 

Differences between North American and European ESG Research. In this article, Mercer explores the often-cited claim that the European market for sustainable investing is more advanced compared to the North American market. Specifically, we discuss differences in research processes, stewardship and thematic product offerings.

Catching Up with the RI Team. Helga Birgden catches up with a new member of the RI team, Richard Fuller.

Investor Groups on Climate Change Release New Survey Results. For a look into the climate change-related investment practices of investors around the world, the European Institutional Investors Group on Climate Change (IIGCC), the North American Investor Network on Climate Risk (INCR) and the Australia/New Zealand Investor Group on Climate Change (IGCC) have published their first jointly sponsored survey. In this article, Mercer shares some related observations and points out areas for improvement in investor practices.

Climate Change Scenarios – Implications for Strategic Asset Allocation. Following our launch of Mercer’s long-awaited report on climate change, Mercer has made resources, including video footage of the launch event in London, available on the report’s dedicated webpage.

 Go to Issue 18 

Governing climate risk - Investors are the emerging force. As the world becomes more interconnected and independent, global governance of key issues such as climate change is critical.

Climate Change Scenarios - Implications for Strategic Asset Allocation. Continued delay in climate change policy action and international coordination could cost institutional investors trillions of dollars over the coming decades, according to this new research by Mercer and a group of leading investors representing $2 trillion in assets under management. 

Highlights from Cancun: The United Nations Climate Change COP16/CMP6 Conference, Mexico 2010. The United Nations Climate Change Conference hedl in Cancun late last year saw an amalgamated front from the represented nations which were left slightly deflated from the outcome of the previous conference held in Copenhagen.

Climate change themed products - opportunities for investors. Mercer discusses the landscape for climate change-themed  investment products and makes observations about performance and future market potential.

Fiduciary Duty - taking Aim at ESG Integration. Members of the US investment community often use the idea of fiduciary duty to explain why investors shouldn’t integrate climate change or other ESG factors into investment decision-making.

Carbon Counts: Assessing the Carbon Exposure of Canadian Institutional Investment Portfolios
Mercer and WWF-Canada recently released a ground-breaking report highlighting climate change as a new risk for institutional investors and providing insights into carbon risk assessment of an investment portfolio.

 View full Report

 View press release (English)

 View press release (French)

Interested in joing the responsible investment team?

 go to Issue 17

The UK Stewardship Code – A sign of things to come? In July 2010, the UK’s Financial Reporting Council introduced a new Stewardship Code, which deals with issues such as the accountability of company boards and engagement between boards and investors. In this article, Mercer discusses the Code and its implications for investors.

Fixed income and the ESG integration challenge. Using a recent client project as an example, Mercer discusses efforts to integrate ESG factors into the investment process for fixed income assets, challenges relating to this asset class, and opportunities for further development.

ESG factors in corporate valuation. Mercer summarizes a report of the same title, released this summer by the Securities Analysts Association of Japan. 

ESG integration: Illustrative examples from the BP oil spill. Recent events in the Gulf of Mexico have shined a spotlight on the link between ESG factors and corporate operations. Using information from four different mainstream investment managers, Mercer illustrates different approaches to ESG integration and discusses how these approaches informed the managers’ views of BP Plc before and after the oil spill.

Improving ESG disclosure in China. As the demand for corporate ESG data continues to grow in China, Mercer points out interesting market developments and discusses investor views on ESG integration.

 Go to Issue 16

Catching up with the RI team: Helga Birgden catches up with a new member of the RI team, Will Oulton.

Does responsible investing impact performance?: Mercer discusses a framework for monitoring the performance impact of responsible investment on a global equity portfolio and provides insight into the initial analysis we have conducted.

Environmental investing: Key issues when hiring managers: As the universe of environmental strategies continues to grow it is critical that investors are discerning in their choice of fund manager. This article outlines some of the key issues to consider when selecting an environment strategy, and what additional insights are needed to identify the best "green" managers.

ESG ratings update: Measuring and monitoring your investments: Mercer shares information about our growing pool of ESG ratings - now at more than 3,500 internationally.

Proxy voting as an informed owner: Investors often overlook the rights that ownership of stock affords shareholders. In this article, Mercer discusses how investors can use these rights to the fullest extent and explores different tools and approaches to behaving as an active owner.

Third annual IIGCC report indentifies climate change as key consideration in manager selection: Mercer summarises some key points from the report, including the increase in the number of asset owners considering investment managers' climate change policies as key to selection.

 Go to Issue 15

The behemoths of the investment industry: Sovereign Wealth Funds and their take on Responsible Investment

Sovereign Wealth Funds tend to recognize the importance of long-term investment horizons by virtue of their purpose. In this article, Mercer explores some of the ways that they are embracing Responsible Investment and building momentum in this area across the institutional investment industry.

DC plan management and pension inconsistency: Are you at risk?

As part of Mercer’s recent global survey of Defined Contribution retirement plans, Mercer asked respondents a number of questions in order to assess the extent to which ESG issues and Corporate Social Responsibility (CSR) strategies are influencing plan management. This article discusses survey results and our observations from the field concerning potential risks from gaps between CSR strategy implementation and DC plan management.

Interested in joining the Responsible Investment team?

Mercer is seeking a talented individual to lead its growing Responsible Investment business in Europe. Read more about the open position.

Responsible Investing: Is it too easy to be green?

No matter what your thoughts on climate change, renewable energy, organic food or recycling, it’s difficult to argue that the markets created around “going green” are growing. In this article, Mercer takes a closer look at green opportunities for investors and details the differences between the investment vehicles designed to take advantage of these opportunities.

Energy efficiency and real estate: Opportunities for investors

The current economic and policy climate in the United States is creating new momentum for energy efficient buildings. This new report provides direct and indirect real estate investors with the background information, academic and industry research, case studies, key steps and best practices for integrating energy efficiency across their portfolios.

• See press release
• See full report

 Go to Issue 14

Microfinance – Effective diversification with social benefits?

Mercer discusses the potential for investments in microfinance institutions to provide attractive risk-adjusted returns with low correlations to traditional assets and to provide much needed capital to individuals in emerging markets. Mercer is seeking indications of interest from investors who would like to receive a proposal to share the costs of further research with other investors.

Canada: Moving forward with Responsible Investment

Mercer takes a look at the state of Responsible Investment in Canada and discusses how current changes are mounting pressure on Canadian investors to integrate environmental, social and governance factors into their decision-making processes.

Responsible Investment extending its reach in Asia

Although only a handful of the signatories to the Principles for Responsible Investment are based in Asia, managers in this region are starting catch up in integrating environmental, social and governance factors into their investment processes. Mercer discusses ESG integration as it currently stands in Asia.

Green opportunities: Which way to turn?

Mercer provides a snapshot of the landscape for environmental opportunities in public equity and plants some landmarks for navigating through this terrain.

Coming soon: A follow-up to the 2007 Demystifying Responsible Investment report

Keep an eye on our website for Shedding light on Responsible Investment: Approaches, returns and impacts, a new Mercer report which will be released in the coming month. The report will act as a follow up to the 2007 Demystifying Responsible Investment Performance report, which Mercer undertook as a joint endeavor with the Asset Management Working Group of the United Nations Environment Program Finance Initiative (UNEP FI).

 Go to Issue 13

What the Hill? Changes in Washington and impacts for institutional investors

Mercer takes a look at recent legislative/regulatory activity on Capitol Hill and discusses related opportunities for investors.

Why consider ESG factors? The case for ESG integration

Mercer explains why investment managers may benefit from considering ESG factors in their investment analysis and how they can go about integrating ESG factors into their decision-making processes.

Mercer’s Divestment Implementation Framework: A new tool for fiduciaries

Learn more about Mercer’s framework for addressing the risks and impacts of country or issue divestment.

Second IIGCC report signals progress among investors on climate change and calls for strong public policy

Mercer summarizes findings from the recent report and stresses the importance of continued investor engagement.

Research identifies large scope to improve carbon footprint of investment portfolios

Mercer, Trucost and WWF release report on carbon risks in UK equity funds.

 Go to Edition 12

Taking ESG ratings to the next level – 1500 strategies now rated

Mercer shares updated information on our growing pool of ESG manager ratings – now at more than 1500 strategies internationally.

Fixed income – the RI world’s next frontier?

Mercer discusses a soon to be released white paper on the issues for RI and fixed income.

Mercer-IFC Emerging Markets Report

Mercer and the International Finance Corporation (IFC) have launched the first ratings on ESG practices of fund managers in China, India, South Korea and Brazil, identifying best-practice examples to pre-empt ESG risks and enhance returns.

Mercer and CDP Investor Report

The Investor Research Project by Mercer and the Carbon Disclosure Project (CDP) set out to capture information on how climate change and CDP data is being used by investors, and how the CDP can increase its uptake into mainstream investment practices.

IIGCC second annual survey

Mercer reports on the climate change activities of IIGCC’s signatories.

 Go to Issue 11

2008 in review: Responsible investment isn't just for Christmas

Mercer discuses recent industry developments, in light of the credit crisis, and our view on the major trends that we expect to see in terms of long-term responsible investing over the coming year.

Beyond the credit crisis

Mercer discusses the role of pension funds in moving to a more sustainable capital market system.

Mercer wins ESG Leaders Award

Mercer has won the award for the most innovative development at the annual ESG Leaders Awards. It received this accolade for its environmental, social and governance (ESG) manager research process.

Mercer offers "carbon footprint" analysis of client portfolios

Through Style Research Portfolio Analyzer (SRPA) Mercer now has the capability to provide clients with analysis of the "carbon footprint" of their portfolio(s), and compare these with the peer universe and the carbon footprint of a chosen benchmark, such as the FTSE All-Share, S&P 500 or Russell 1000.

Sustainable Investing - The art of long term performance

Together with renowned industry leaders, Mercer contributes to a new book that goes some way toward defining and setting a future direction for Sustainable Investing. Mercer's chapter on Clean Energy Opportunities utilizes our research insights to outline opportunities arising from the shift towards a lower carbon economy in response to climate change.

Pension Collaboration

One of the Social Science Research Network's top 10 most downloaded articles of the year, Mercer's Danyelle Guyatt discusses collaboration as a highly effective pension management strategy.

 Go to Issue 10

Does the ESG mantra extend to emerging markets?

Mercer reveals preliminary findings from an extensive research study commissioned by the International Finance Corporation (IFC), on the extent of ESG integration into mainstream investment in emerging markets.

Responsible investment and defined contribution plans - addressing frequently heard concerns

Mercer examines the key concerns, myths and solutions for plan trustees considering adding an SRI option to their DC plan.

Charities investing responsibly

Mercer discusses new research findings that the general public in the UK expect charities to take an ethical or socially responsible stance to their investments.

ESG manager research pool grows

Mercer has now rated over 500 mainstream investment strategies globally to assess the degree of ESG integration and active ownership practices into core processes. The ESG ratings pool continues to grow and crosses over equities, fixed income and alternatives. This article presents the highlights of our research findings to date.

 Go to Issue 9

ESG ratings of fund managers - a step closer towards the mainstreaming of ESG integration

Mercer discusses the objectives and progress of our integrated ESG manager research process, including how the ratings can be used and results so far.

A firsthand look at investor collaboration - Mercer at the PRI and ICGN annual meetings

Mercer comments on the power of collaboration and the key issues and achievements discussed at each of the PRI and ICGN annual meetings in Seoul.

Managing reputational risk and alternative investments

Mercer examines the relationship between reputational risk and investment return, for funds considering alternative asset allocations.

Mercer and IFC to deliver first ‘sustainability rating’ for emerging market investment

For the first time fund managers in emerging markets will be rated based on their capacity to incorporate environmental, social and governance factors (ESG) into their investment decisions as part of a major new research initiative commissioned by the International Finance Corporation (IFC), the private sector branch of the World Bank Group.

 Go to Edition 8

Investing responsibly in alternatives

As Mercer discusses different approaches to responsible investment in alternative asset classes, highlighting themed funds and other solutions.

Engagement - Managers, strategies and approaches

Mercer shares preliminary observations from an on-going study of the engagement practices of activist managers.

UN PRI - Mercer's progress as a signatory

Mercer reviews its own progress as a signatory to the UN PRI and discusses observations on common successes and setbacks.

Responsible investment trends

Mercer completes an annual review of developments in RI around the globe, including key players, products, services, industry trends and research.

 Go to Issue 7

We've passed the "Tipping Point" - 2007 in review & outlook for 2008

Mercer discusses the year in review and looks forward to trends for 2008.

Integrating ESG into emerging market investments

Mercer discusses the different approaches being taken by fund managers in integrating ESG into emerging market strategies, highlighting the examples of good practice and the potential for further innovation. See related press releases.

ABN AMRO creates fund to capture clean technology opportunities

ABN AMRO's Eco-Markets commissioned Mercer to undertake research into clean technology investment opportunities to support its initial investments in an in-house investment fund, "Eco-Invest".

Mercer's Responsible Investment team expands

Mercer's investment consulting business adds six new professionals globally.

 Go to Issue 6

Investing in clean energy, clean technology and carbon trading

As more investors direct their money toward cleantech opportunities, Mercer provides insights and considerations for investors considering an allocation.

Demystifying responsible investment performance

A comprehensive review of key academic and broker research on ESG factors, by Mercer and the Asset Management Working Group of UNEP FI, demonstrates that the integration of ESG factors does not have to come at a cost to investment performance, and in many cases can enhance it.

Responsible investment team grows in Asia-Pacific

Mercer's investment consulting business has appointed Helga Birgden as its new Head of Responsible Investment for Asia-Pacific in Melbourne.

Fifth annual carbon disclosure project launched

Bill Clinton releases the 5th annual report, accompanied by a partnership announcement by Wal-Mart. Mercer comments on both the success of the CDP and what it means for investors.

 Go to Issue 5

Landmark industry assessment released

The PRI Report on Progress 2007 includes a ground-breaking assessment on how investors are integrating ESG issues within investment decision making and ownership practices. The assessment tool was developed by Mercer's investment consulting business with extensive input from the PRI Secretariat, Assessment Working Group and a range of experts.

Defined contribution plans and SRI

Mercer's investment consulting research shows increasing demand for socially responsible investment (SRI) options in American defined contribution retirement plans.

Expanded resources for responsible investment

Mercer's investment consulting business has added three professionals to its global Responsible Investment business in London.

Responsible investment position in Asia-Pacific

Mercer's investment consulting business is looking for an experienced professional to join our Responsible Investment team in the Asia-Pacific region.

 Go to Issue 4

The language of responsible investment

An industry guide to key terms and organisations, this practical resource explains responsible investment terms used around the world.

Responsible investment for faith-based investors

Outlining how responsible investment provides the opportunity to achieve dual objectives - ethical and financial, this article encourages faith-based investors to get religion on responsible investment.

Al Gore speaks on ESG issues at Mercer's investment consulting conference

As keynote speaker to the second annual European Investment Focus, the former Vice President explored the investment rationale for integrating environmental, social and corporate governance issues into the investment decision making processes of global pension funds.

 Go to Issue 3

ESG factors & Australian investment managers

Ground-breaking research examines the extent to which Australian investment managers are integrating ESG factors into their decision making processes.

United Nations Principles for Responsible Investment (PRI)

Mercer's investment consulting leader Tim Gardener discusses the importance of the Principles for Responsible Investment global initiative in his article "Investment Principles for Tomorrow".

Mercer's investment consulting business becomes signatory to the PRI

After serving as consultant to the development process, Mercer's investment consulting business has become a signatory to the Principles.

Participate in survey on the US Defined Contribution (DC) Socially Responsible Investment (SRI) Market

If you you are a US DC plan sponsor, regardless of your experience with SRI, register to participate in this survey on the "state-of-play" of SRI and DC.

 Go to Issue 2

Fearless Forecast: Responsible investment results

Climate change has become an important economic, social and political issue which is increasingly difficult to ignore.

Perspectives on responsible investment: A survey of US pension plans, foundations and endowments, and other long-term savings pools

Sponsors of institutional investment pools in the US expect moderate growth in socially responsible investing over the next two years, according to a survey by Mercer Investment Consulting.

New report urges pension trustees to address climate change

This guide states that it is consistent with fiduciary responsibility for trustees to address the financial risk posed by climate change in managing risk and maximising return across plan investments.

Report on the evolution of SRI

Socially responsible investing, or SRI, has often been viewed with suspicion because of its association with ethical investing – one of the more nebulous, unloved terms in the investment industry.

New research shows investment managers integrating ESG practices to meet demands of asset owners

What gets rated gets reviewed: new research shows investment managers integrating ESG practices to meet demands of asset owners.