A software package on offer from ethical screening service EIRIS will help investment managers to cr...
A software package on offer from ethical screening service EIRIS will help investment managers to create personalised ethical benchmarks.
EIRIS Ethical Portfolio Manager (EPM) software, launched this week, runs on the Windows platform, and provides information on more than 850 UK, 500 US and 500 European companies. It allows users to choose their own framework for analysing companies' environmental and social performance.
The charging structure of the product is based on how often the system is used by the manager. Although not targeted at IFAs, the service will aid fund managers in keeping track of any ethical changes in the companies in which it invests and how it will impact on the shareholder value.
Fund managers can set up the service along side their current investment portfolios and track the ethical ratings of the companies in which it is invested as a benchmark tool. Users choose from a list of 40 research areas such as genetic engineering, GM foods or animals, from a menu. From this they can grade a company's performance according to their level of concern, either using an in/out system which excludes transgressors completely, or a points system.
EIRIS has developed three strategies to clarify approaches to ethical investment. Preference involves rating companies according to an ethical investment policy; engagement indicates companies which need encouragement to improve ethical performance; and screening creates an acceptable list of companies in which to invest.
The ethical investment market has grown from £0.37bn in May 1992 to £2.6bn by January 2000. In June 1999 EIRIS reported that more than three quarters of adults thought their pension fund should operate an ethical policy.
Karen Eldridge, head of client services at EIRIS, said fund managers should subscribe to EPM with the same conviction they subscribe to a service like Reuters. She said: "Every fund manager should have access to this information, especially with pensions disclosure becoming an increasingly important requirement."
BT's pension fund, the largest in the UK, recently announced its commitment to ethical investment while the third biggest fund, the Universities Superannuation Scheme (USS), was recently reported to be considering a similar move.
According to last year's report by EIRIS, 77% of adults agreed their pension scheme should operate an ethical policy whenever it could do so without reducing final returns, while 83% should make public their approach to ethical investment.
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The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.