|LONDON (2 August 2018) - Aon, the leading global professional services firm providing a broad range of risk, retirement and health solutions, has developed an Environmental, Social and Governance (ESG) rating system for buy-rated investment strategies. The system is designed to assess whether and how well investment managers integrate Responsible Investment (RI), and more specifically ESG considerations, into their investment decision making process.
Aon's ESG rating system will sit alongside its existing strategy and due diligence ratings and is designed to provide an added dimension to the fund analysis. The ESG ratings are based on a variety of qualitative factors, starting with a proprietary due diligence questionnaire, which is completed by the fund manager, and followed by a review of the managers' RI related policies and procedures, such as active ownership, proxy voting, etc.
After a thorough review of all materials, data and policies the manager will be awarded an ESG rating using an agreed reference framework. Aon's ESG assessment process is consistent with the UN PRI's Investment Manager reporting framework.
Tim Manuel, head of responsible investment for the UK at Aon, said:
"The ESG landscape is both growing and evolving - and navigating it is highly subjective. As yet, there are no widely accepted global standards that define 'materiality' for ESG impacts. As a result, the assessment of an ESG rating is more about determining whether the manager's process is credible, robust, consistently applied and repeatable.
"This will change in the future as consensus emerges around which impact metrics are financially material and as 'impact' becomes easier to measure. However, our clients are increasingly interested in exploring or implementing responsible investing initiatives and so we feel this rating is an additional tool they can use when making investment decisions."
Aon's full guide to the ratings system is available here: https://aon.io/2LU0V51
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.
Aon announced in May 2018 it will retire the business unit brands of Aon Benfield and Aon Risk Solutions, which follows the retirement of the Aon Hewitt business unit brand in 2017. This move was designed to increase the rate of innovation across the firm and make it easier for colleagues to work together to bring the best of Aon to clients. Aon has five specific global solution lines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions, Health Solutions and Data & Analytic Services.