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fund manager expands SRI unit to improve engagement

September 2000

Friends Ivory & Sime (FIS) is expanding its socially responsible investment unit.

FIS, the investment management arm of Friends Provident Group, will recruit two additional staff this autumn to bring its nine-strong team of SRI researchers up to 11.

Craig Mackenzie, head of FIS’s SRI unit, said engagement was proving to be labour-intensive. ‘We are expanding partly because we’re winning more business, but the more we do engage, the more we realise how hard it is,’ he said.

‘To be successful in getting companies to change their behaviour you need to spend more time with them and to put experienced people into place who really know their stuff.’

The fund manager is a leader in the field of positive engagement on SRI issues with companies. Ethical fund managers have traditionally built portfolios by excluding companies deemed unacceptable, but positive engagement involves entering into a dialogue with companies on their social, environmental and ethical performance.

MacKenzie said he was becoming worried about complaints from companies that inexperienced and often na've investment staff were being sent to engage with them on corporate social responsibility matters.

‘I’ve been concerned about the number of people in the pensions industry, for instance, who have said engagement is what they want to do, but who then haven’t recruited people to do the job.

‘From our point of view we’re interested in recruiting people who have worked in big companies on environmental and social responsibility matters and who actually know about these things. If you’re talking to a senior manager at a big company you need to really understand the issues and demonstrate you have something to give. Historically, that’s not been the case.

‘It’s great that more investors are getting involved in this issue, but we need to work out a way to engage more effectively and meaningfully.’

MacKenzie said FIS would be thinking laterally about applicants for its new jobs and would consider applicants who had previously worked for a consultancy ‘or possibly an advocacy organization’.




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