Appendix 63

APPENDIX

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 64 Appendix

Table A: Background Details of the Sampled SRFIs

Type of Market Launch
SRFI Assets Brief Description
Institution Spread Date
The Co-operative Bank, set up in 1971,
was the first high street British bank to
have announced a customer-derived ethical
stance in 1992. It falls under the Co-
operative Financial Services (CFS) which
in turn forms part of The Co-operative
The Co- Group, the UK's largest consumer co-
£45.6 billion
operative Bank UK 1971 operat ive. CFS compr ises T he Co -
(as at 2010)1
Bank Plc operative Ban k and its inter net ban k,
smile, Britannia Building Society, The
Co-operative Insurance, The Co-operative
Investments and The Co-operative Asset
Management. In 2009, CFS employed
12,000 staff, operated over 300 branches
and achieved net revenue of £2.0 billion.
The Bank is officially registered in the
Netherlands (1980), with branches in
Belg iu m (1993), t he U K (1995), a nd
Euro 5,617
Spain (2004). Its mission is to promote
million (for
Triodos sustainable banking by financing socially
Bank the Triodos Europe 1980
Bank worthwhile projects as well as lending
Group, as at
to social busi nesses, char ities and
2010)2
organisations pursuing positive social,
environmental and cultural goals. By 2010,
the bank has a total of 285,000 customers.
It is the first SRFI set up in the UK to
finance ecology-friendly properties. It is
Ecology Mutual a mutual building society which aims at
£95,687,000
Building Building UK 1981 providing loans to promote sustainable
million 3
Society Society housing and sustainable communities. 4
Cur rently, it has over 10,000 account
holders.
Unity Tr ust Bank describes itself as a
£620.7 specialist bank offering banking services
Unity Trust million (as at to social enterprises, charities, councils,
Bank UK 1984
Bank 31 December trade unions and small businesses. It has
2010) 5 its roots in the co-operative and trade
union movements.

1 The Co-operative Bank Plc, Building a better society, Financial Statements 2010, http://www.co-
operativebank.co.uk/corp/pdf/Bank_Final2010.pdf
2 Triodos Bank Annual Report 2010, http://report.triodos.com/en/2010/servicepages/downloads/files/
annual_report_triodos_ar10.pdf
3 Ecology Building Society, Annual Report 2010, http://www.ecology.co.uk/downloads/aboutus/
reports/2010-annual-report.pdf
4 www.ecology.co.uk
5 Unity Trust Bank, Summary Report and Accounts 2010, http://www.unity.co.uk/upload/pdf/Summa
ry_Report_and_Accounts_2010.pdf

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 Appendix 65

Type of Market Launch

SRFI Assets Brief Description
Institution Spread Date
A X A I M is a key player i n the asset
AXA Investment Euro 516 International ma n ageme nt i ndu st r y. I n 2010 A X A
Investment Management billion (as at (23 1994 Investment Managers was ranked the 14th
6
Managers Company 2010) Countries) largest asset manager worldwide in terms
of assets under management.
It is a specialist insurance and financial
services company, established in 1887,
Specialist
to protect the Anglican Church. Over the
Ecclesiastical and £1,694,441
years it has grown to provide tailored
Investment Financial (as at Dec International 1887
i nsu rance solut ions for char it ies and
Management Services 2009)7
heritage property owners. It also offers
Company
risk management and ethical investment
management.
F&C A s s e t M a n a ge m e nt i s a mu lt i-
specialist asset management group. It
Investment Over £100 traces its origins to the launch of the first-
F&C Asset
Management billion (as at International 1868 ever listed pooled investment fund, the
Management
Company 2010)8 Foreign & Colonial Investment Trust, in
1868. It has offices in seven countries,
including the UK.
Fr iend s Life br i ngs toget her t he U K
Friends
operations of Friends Provident and the
Provident
Ethical Unit £111 billion International life assurance businesses acquired from
plc (now 1810
Trust (as at 2010)9 (8 Countries) Bupa and AXA UK. The Friends Life set
known as
up the first ethical unit trust in the UK in
Friends Life)
1984 – the Stewardship family of funds.
Henderson Global Investors is a leading
independent global asset management
£60,452 f ir m. The company provides its
Henderson Investment
million (as institutional, retail and high net-worth
Global Management International 1934
at 31 March cl ie nt s a c c e s s t o sk i l le d i nve st me nt
Investors Company
2011)10 professionals representing a broad range
of asset classes, including equities, fixed
income, property and private equity.
Insight Investment is one of the leading
U K i nvest ment ma nagers. It of fers a
£116 billion
full range of asset types from equities to
Insight Investment under
bonds, property, hedge funds, and private
Investment Management management International 2002
equit y. I n addition to its mainst ream
Management Company (as at 31
funds, Insight Investment has two ethical
March 2009)11
funds: Insight European Ethical Fund and
Insight Evergreen Fund.

6 AXA Investment Managers Results 2010, http://www.axa-im.com/index.cfm?pagepath=pressandkn

owledgecentre/newsID=2604C890-BCDF-3CCE-16323F9CFDD72C27/news_release_02032011
7 Ecclesiastical Insurance Office Plc Annual Financial Report For The Year Ended 31 December 2009, http://
www.ecclesiastical.com/Images/PDF%20-%20EIO%20Annual%20Financial%20Report%202009.
pdf
8 http://www.fandc.com/portal/?reset
9 http://www.friendslife.co.uk/common/layouts/subSectionLayout.jhtml?pageId=fpcouk/SitePageSi
mple%3Aabout_us_fastfacts#
10 http://www.henderson.com/sites/henderson/aboutus.aspx
11 European SRI Transparency Guidelines, Insight Investment, http://www.insightinvestment.com/
global/documents/riliterature/821270/Euro_SRI_Transp_Guide_2009.pdf

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 66 Appendix

Type of Market Launch

SRFI Assets Brief Description
Institution Spread Date
Jupiter Asset Management
manages assets across a wide range of
international and UK based mutual funds,
multi-manager products, hedge funds,
Investment institutional mandates, and a variety of
Jupiter Asset £538.2
Management International 1985 portfolios specialising in markets such
Management million
Company as the UK, Europe, Asia and Emerging
Europe, as well as specialist thematic
investments such as socially responsible
investments (SRI) and global financial
equities.
T he asset ma nagement busi nesses of
Morley Fu nd Management Ltd and
Norwich Union Investment Management
Lt d we r e m e r ge d i n Ju ly 2 0 0 0, a n d
Norwich Savings, subsequently became Aviva Investors
£380 billion
Union Insurance, Global Services Ltd in September 2008.
(as at 31 Dec International 1797
(now, known Fund Aviva is a leading provider of life and
2009)12
as Aviva) Management pension products in Europe (including
the U K) with substantial positions in
other markets around the world. Its main
activities are long-ter m savings, fund
management and general insurance.
Rathbone Unit Tr ust Management is a
wholly-owned, London-based subsidiary
Rathbone Investment £1.1 billion
of Rathbone Brothers plc. It is a leading
Unit Trust Management (as at 31 UK 1999
UK fund manager, offering a range of
Management Company March 2011)13
equity and bond unit trusts and a multi
asset portfolio.
£156.9 Standard Life Investment has a global
Standard Investment billion investment network and has off ices in
Life Management (as at 31 International 1995 several international markets. It aims to
Investments Company December meet its clients’ expectations and offers a
2010)14 range of products and services.

12 http://www.aviva.co.uk/about-us/
13 http://www.rutm.com/about-us.aspx
14 http://uk.standardlifeinvestments.com/consumer/about_us/index.html

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 Appendix 67

Table B: Summary of the Observed Practices of the SRFIs

SRFIs Observed Practices
• Corporate responsibility is integrated into business practices.
• Corporate responsibility is seen as a safeguarding measure for the business.
• A wide range of CSR values is endorsed, including governance, social, ethical and
environmental issues.
• Processes for stakeholder dialogue are in place.
• There is special involvement of customers in the development of the Bank’s ethical
policy.
• Transparency is endorsed and full disclosure on CSR is adopted. The bank has a
The Co-operative well-grounded corporate reporting policy, which includes publication of Partnership
Bank Plc reports, Sustainability reports, Ethical Consumerism Report, Financial Statements,
Eurosif Transparency Guidelines.
• The Bank has developed “specific, measurable, achievable, realistic and timely”
indicators to measure its progress against the triple bottom lines of delivery of value,
social responsibility and ecological sustainability. This shows the Bank’s efforts in
quantifying the reporting of its performance.
• The Bank has a sustainable development policy and is proactive in pursuing the
sustainability agenda.
• It can be rated as a ‘leader’ in its approach towards CSR.
• Triodos Bank recognises CSR as part of its business policy.
• CSR is taken to incorporate social, ethical, environmental and cultural values. The
Bank endorses policies like micro-credit and fair trade financing in developing
countries. It lends to organisations like charities, social businesses and supports the
financing of community projects and environmental initiatives.
• The Bank pursues sustainable banking which takes account of people, the planet and
profit.
Triodos Bank • It believes in taking positive action in order to contribute towards sustainability and in
instilling socially responsible businesses.
• It believes in taking a more active role in the engagement of companies it invests in.
• The bank publishes its approach to lending and an annual list of projects which it
finances. No quantitative social reporting or indicators have been developed. Its
reporting system is still of a descriptive nature.
• On basis of the above, its CSR approach can be described as being at the
‘integrating’ stage.
• Unity Trust Bank acknowledges that social responsibility is integrated within its
business practices. It states “When we were first established, in 1984, our vision was
to put social change, social benefit and community involvement at the core of our
business...We are proud to have been one of the early adopters as we have watched
Corporate Social Responsibility (CSR) become increasingly important for just about
every type of business.”15
• It focuses its policies on the third sector – trade unions, charities, voluntary
organisations, credit unions and social enterprises – which is taken as a key sector for
the bank’s financing.
• Its reporting policies are still descriptive. It describes its customers, shareholders,
Unity Trust Bank
products, history and challenges. The Bank does not report on the management of
its CSR responsibilities. Nonetheless, it publishes a quarterly bulletin to provide
information on developments in the social economy. It also reports the activities
the Bank and its staff are involved in on an annual basis through its Unity in the
Community initiative.
• No engagement in stakeholder dialogue has been mentioned, except that special efforts
appear to be made by the bank to know the organisation it finances and it works with
other organizations to bring about change in the community. It works closely with its
customers in an attempt to understand their needs, aims and future plans.
• CSR performance can be said to be in a ‘developing’ stage.

15 http://www.unity.co.uk/csr

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 68 Appendix

SRFIs Observed Practices

• The Ecology Building Society considers the environment its key sector of focus.
Environmental policies are embedded within the business.
• It practises what it believes in – which is commitment to ecological and sustainable
living. This is reflected through the construction of its own ecological building.
• It provides details on the projects it finances (e.g. case studies of ethical mortgages)
Ecology Building
on its website and through newsletters. However, its reporting is still of a descriptive
Society
nature.
• It publishes a Corporate Social Responsibility Policy where emphasis is placed on its
environmental policy. The CSR statement also discusses its initiatives vis-à-vis its
stakeholders.
• Its CSR policy can be described as ‘developing’.
• CSR is believed as an important step in winning the preference of all its stakeholders.
CSR is not seen as being a choice for asset managers but is a necessity.
• CSR is broadly defined as incorporating ESG values. No specific description is
publicized except for AXA’s negative screening of cluster bombs and land mines.
• Engagement is also adopted as a CSR strategy as a means to sharing best practice and
learning from peers. It has publicized its voting and engagement policies.
• AXA has invested in an “RI search tool” – an IT package – to implement its CSR
strategy across all its areas of expertise. The organization also has a SRI unit. These
AXA Investment
show commitment to implementing CSR by the organization.
Managers
• CSR international initiatives are adopted – e.g. UN Stewardship Code, Eurosif
Transparency Guideline as a means of “lending credibility to our responsible
investment offering”. Reflects a more compliance focused CSR strategy.
• Reporting level appears to be still developing. No additional reports published besides
the write-ups on the company website.
• The CSR model adopted by the institution appears more compliance focused and
financially-oriented rather than as a means of being truly “socially responsible”.
• CSR policy can be described as ‘reacting’.
• Believes CSR and SRI add to long term shareholder value.
• SRI fund strategy is clearly defined – negative and positive screening criteria;
engagement policies; has established internal SRI research analysis; and have an
Independent Supervisory Panel.
• A number of ethical funds have been established.
Ecclesiastical • Donates all surplus profits to charity and collaborates with community partners to
Investment bring about change. Perceives partnership as being more than making a donation.
Management • Reporting levels are frequent though still descriptive – publishes regular ‘Amity
Insight SRI research’ publications and a thrice yearly ‘Investment Watch’ investment
newsletter for client-investors. Monthly Fund Sheets are also provided detailing Fund
performance and Fund Manager commentary. The Annual and Interim Fund Reports
provide additional detailed information on SRI fund policy.
• CSR policy can be described as being ‘developing’.
• Considers SRI and CSR as fundamental to creating value for investors.
• CSR policy is widely defined, incorporating various ESG issues. The company
subscribes to the sustainability agenda and takes account of environmental issues
within its SRI criteria. Formal system in place to manage CSR responsibilities.
• It details out its ethical policies, company selection, company research, company
approval and company monitoring procedure.
F&C Asset • It describes itself as a “market leader in the f ield of Governance & Socially
Management Responsible Investment” and through its engagement policy (called reo®) it promotes
its governance and SRI values with companies, government, regulators and the wider
community.
• Transparency in reporting, although only descriptive and no quantified reporting
noted. It publishes quarterly reports on its shareholder engagement and annual voting
and governance reports.
• The CSR policy of F&C can be viewed as ‘developing’.

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 Appendix 69

SRFIs Observed Practices

• Corporate responsibility is well integrated into business practices.
• A number of ESG issues are endorsed. CSR embraces community as well as
philanthropic activities.
• Friends Provident recognises the impact of CSR on different stakeholders including
the workplace, marketplace, the environment and the community. Descriptive reports
are published to indicate performance in these areas of influence.
• It has a well grounded CSR reporting policy. The following reports are published: (i)
CSR reports, (ii) various fund literatures to explain what the company does, what are
Friends
its ethical and social policies, how it executes its CSR policies, which companies it
Provident
invests in and how it engages with other companies (the reo® approach), (iii) Eurosif
Transparency Guidelines, (iv) a newsletter entitled “Principles”, (v) remuneration
reports, (vi) annual financial reports.
• It has a detailed engagement process in place.
• It has a sustainable development policy and is proactive in pursuing the sustainability
agenda.
• In the absence of quantified reporting, its CSR strategy can be described as
‘integrating’.
• It recognises its CSR responsibilities towards its different stakeholders and
incorporates CSR within its business practices.
• This is reflected in its SRI criteria and through the good governance policies adopted
by its funds. Its SRI fund process was given AAA rating by Novethic in 2004.
• Among its positive screening criteria is its endeavour to invest in industries of the
future.
• It subscribes to and proactively pursues the sustainability agenda.
• It promotes an engagement policy with clearly defined aims – e.g. holding regular
Henderson
dialogues with companies to review their CSR performance; selecting a number of
Global Investors
sectors for particular investigation; and pursuing company specific issues.
• Transparency is promoted through its reporting mechanisms. It publishes (i) a
Sustainable and Responsible Investment Annual Review, (ii) a Code of conduct for
its employees, (iii) the Eurosif Transparency Guidelines, (iv) the SRI criteria for each
of its funds, (v) its financial reports. However, although it recognises the different
aspects of CSR, there is no quantified reporting on its CSR performance. However
there is a good disclosure track record.
• Henderson’s CSR approach can be described as ‘integrating’.
• Corporate responsibility is integrated into business practices. Insight Investment
pursues a high standard of corporate responsibility and corporate governance as part
of its aims to improve financial performance. It also considers CSR as part of its
responsibility towards investors.
• It defines its CSR/SRI policies as well as its engagement strategies. It also clearly
stipulates its ways of achieving its objective of high standards of corporate governance
and corporate responsibility: (i) company monitoring; (ii) dialogue; (iii) voting; (iv)
policy research; (v) public statements; (vi) sponsoring debates; (vii) working with
Insight
others.
Investment
• It subscribes to the sustainability agenda and proactively pursues it.
• It has formal policies and systems in place to manage its CSR responsibilities.
• The company is transparent in its reporting. It publishes (i) a statement of policy
with regard to corporate responsibility and corporate governance, (ii) various funds
literature to explain what its aims are and how it achieves them, (iii) the Eurosif
Transparency Guidelines, (iv) a detailed report on the criteria for implementing its
ethical policies, and (v) general literature on SRI and global business principles.
• Its CSR approach can be classified within the ‘integrating’ category.

16 www.henderson.com/global_includes/pdf/sri/SRIAnnualReport2004.pdf

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 70 Appendix

SRFIs Observed Practices

• Corporate responsibility is incorporated into business practices. Its CSR policies
also include charitable activities in the form of a matched employee giving scheme,
charitable fund raising, sponsoring of arts.
• The SRI & Governance Team manages its CSR/SRI policies and it has in place
an external Advisory Committee Board to determine any review of policies. The
Compliance Department ensures the funds’ holdings remain compliant with its
policies.
• It engages in positive and ongoing dialogue with senior management of companies to
encourage the addressing of environmental and social impacts on their businesses.
Jupiter Asset
• It subscribes to the sustainability agenda and proactively pursues it through the
Management
management of its three environmentally-geared funds.
• It has a well grounded reporting policy. Publishes the following reports: (i) a number
of fund’s literature to explain SRI at Jupiter, its negative and positive criteria of
investment, its fund facts and products, its performance in companies that address
environmental concerns; (ii) Eurosif Transparency Guidelines, (iii) Jupiter’s approach
to responsible shareholder – Voting and Engagement Report; (iv) Jupiter’s Corporate
Governance and Voting Policy 2005; and (v) an SRI Bulletin to inform its stakeholders
of any latest developments in the SRI sector.
• Its CSR approach can be viewed as ‘integrating’.
• Aviva promotes good governance policies and subscribes to the principles under the
Stewardship code. “The purpose of the Code is to improve the quality of engagement
between institutional investors and companies to help improve long-term returns to
shareholders and the efficient exercise of governance responsibilities.”
Norwich Union
• No ESG values are promoted per se. But emphasis is placed on environmental and
(Aviva)
social issues besides governance issues.
• Reporting levels are still low. Corporate Governance and Corporate Responsibility
Voting Policy disclosures are published. Stewardship policy is also published.
• Overall, CSR policy appears to be ‘reacting’
• CSR policies are related to environmental impacts, employee welfare, and community
involvement.
• Negative and positive SRI criteria are detailed out. No formal engagement policy is
adopted.
• Reporting is more on financial performance of the ethical funds rather than on social
Rathbone
responsibility issues (e.g. Rathbone Ethical Bond Fund Factsheet, Rathbone Ethical
Unit Trust
Bond Fund Quarterly investment report, Rathbone Ethical Bond Fund Manager
Management
Report).
• Signatories of the U N Principles for Responsible Investment and the Carbon
Disclosure Project. As such, CSR and SRI policies appear to be more compliance
focused.
• CSR policy appears to be at a ‘reacting’ stage.
• Management is committed to include CSR within its business practices.
• It considers environmental effects when examining companies’ policies and practices
of SRI. It further commits itself to an engagement approach to encourage best
practices in ESG issues.
• Some of its publications are: (i) an annual newsletter, (ii) a corporate governance
Standard Life
guidelines booklet, (iii) its Eurosif Transparency Guidelines, (iv) funds literature
Investments
relating to SRI, financial returns, rules of engagement.
• No CSR reports are published. No CSR performance indicators have been developed
to assess the fund’s impacts on its various stakeholder groups. Its reporting measures
can be said to be of a descriptive nature.
• The fund’s CSR approach appears to be at a ‘developing’ stage.

Source: Author’s Own

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 Appendix 71

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 72 Appendix

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