Ethical Performance
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new indicators will assess strategies for engagement with companies

September 1999

New indicators to assess how successful fund managers are at persuading companies to improve their social and environmental performance are being developed by the Ethical Investment Research Service, the UK-based ethical research body.

The ‘engagement indicators’ will take account of how a fund seeks to influence a company, whether it can provide ‘evidence of influence’ and its voting record as a shareholder.

A number of ethical funds now say they seek to engage with companies. EIRIS claims the indicators will provide the ‘first independent means of objectively evaluating such funds on the basis of engagement activities’.

However the indicators, which will appear before 2000, are also likely to interest pension funds.

Karen Eldridge, head of EIRIS client services said, ‘Pension funds may want to develop their own engagement strategies’. The engagement indicators would give pension fund trustees and their advisers a clear framework for setting up an engagement strategy and monitoring whether it was effective, she added.




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