Responsible Investment (RI) is best described as the process of formally building in consideration of environmental, social and governance (ESG) factors into investment processes. This is not new to many fund managers but it often is done as an adhoc task rather than in a formal way.

What it is:
An enhancement to the analysis process. Analysts have a better set of information by including ESG research. The universe of potential investments does not change.

What it isn’t:
It is not an ethical policy that screens out companies and industries. Traditional ethical approaches usually reduce the size of the investment universe through the application of negative screens.

The United Nations Principles for Responsible Investment (UN PRI) set out a common sense checklist of measures that funds and fund managers can use as a framework for implementing RI. Seacliff Consulting is a professional service partner signatory to the UN PRI.