In the latest assessment by the Principles for Responsible Investment (PRI), both Aegon Asset Management and Kames Capital scored the highest possible rating for strategy and governance of responsible investment activities.
PRI is the world's leading authority for responsible investment. Its annual assessment report provides an overview of signatories performance in comparison to peers on a number of indicators including: strategy & governance, internally managed & active ownership selection, and externally managed selection, appointment & monitoring for different asset classes.
For Kames Capital, Aegon Asset Management's business in the UK, this was the third consecutive year in which it received the highest possible rating of A+, awarded to just 21% of the PRI's 935 asset manager signatories. Aegon Asset Management (AAM) improved on its 2016 rating of A, and also achieved the maximum A+.
Both AAM and Kames Capital scored 100% on all 30 indicators in strategy and governance, placing them in the top five percent of the performance band. Making Responsible Investment Policy and guidance documents more publicly available and increasing dialogue with public policy makers were key to the rating improvement.
For asset classes managed directly by AAM, all categories improved by a full letter grade, with the majority now scoring an A. This improvement was a result of strengthening the approach to engaging with companies AAM invest in, increasing proxy voting activity, and the frequency of engagement, and implementing processes to ensure Environmental Social and Governance (ESG) analysis is robust.
The assessment also identified that AAM still has scope to improve its external manager selection, appointment and monitoring. "Improving in this area is part of an 'External Manager' project which is already underway," says Responsible Investment Manager, Emanuele Fanelli.
"The project involves two key areas. Firstly, working more closely with existing third party fund managers to ensure they're aware of Aegon's Responsible Investment Policy, and looking at ways to ensure they adhere to it. And secondly, integrating the Responsible Investment Policy into all new agreements with third party investment parties."
About the PRI assessment methodology
The PRI's annual reporting and assessment process supports the efforts of its 1773 signatories in their implementation of the Principles for Responsible Investment. This helps signatories to identify areas for improvement and supports continuous learning and development, year-on-year, across asset classes, and with peers at the local and global level. It also facilitates dialogue between asset owners and investment managers on responsible investment activities and capabilities.