Mercer reports to include ESG ratings

Global change to be done by end of 2012.

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story_images_icebergMercer has announced that it will include environmental, social and governance (ESG) in client reports related to manager searches and performance.

Mercer assigns ESG ratings across investment styles, asset classes and geographies as part of its manager research process.

“ESG factors have the potential to become more important risk-return drivers for our clients,” said Andrew Kirton, Mercer’s global chief investment officer. “A growing number of institutional investors are expressing an interest in ESG assessments; however, relatively few managers integrate these factors into their investment processes. Incorporating ESG as a key aspect of the search process will promote constructive dialogue with managers on ESG related issues and result in better overall outcomes.”

Jane Ambachtsheer, Mercer’s global head of responsible investment, said that including ESG ratings will allow clients to better select and monitor managers. “The list of UN PRI signatories continues to climb, yet only 9% of the more than 5,000 investment strategies we have rated achieve our highest ESG scores,” she said.

Mercer will implement the new ESG reporting process globally by the end of 2012.

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