Rating our investment managers

By Jana van Rooijen, Responsible Investment Specialist at Momentum Investments

Jana van Rooijen, Responsible Investment Specialist at Momentum Investments

Responsible Investment (RI) practices contribute to our greater purpose, which is to enable businesses and people from all walks of life to achieve their financial goals and life aspirations. We help people grow their savings, protect what matters to them and invest for their future.

We rate investment managers annually so that we better understand how far along they are on their RI journey. The scope of RI practices is wide, and we therefore assess the investment companies’ overall RI framework and the level of transparency confirming their actions.

As supporters of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), it is in our interest to encourage investment managers to adopt a climate change focus for a sustainable and Just Transition future. We continue to encourage our investment managers to acknowledge climate-related risks and for it to be evident in their respective investment manager’s policies.

It is important for us to encourage other investment managers, service providers, asset consultants and investment owners to apply RI practices in their daily operations.

Why an investment manager RI rating?

We created an investment manager RI rating model to establish the level of RI practices that the various investment managers apply. This model complements the appointment, monitoring and review process of the investment managers.

We have different portfolio and business offerings, which provide various ways for clients to gain access to investments:

  • For direct investments and where we have investment management agreements in place with underlying investment managers, we can direct compliance with our principles.
  • Where we outsource to external investment managers, their approach to Environmental, Social and Governance (ESG) factors is an important consideration when we assess their capabilities. We focus on their approach, advocate and mandate alignment where practical and monitor their progress. The appointment process will always consider the due diligence report of our investment manager’s research team, with the RI rating score.
  • Clients have access to execution and advisory services, which allow them to select their own investment managers. In some instances, these investment managers may not comply to the extent we believe they should, but they meet our minimum requirements.

We engage with investment managers

We assessed 56 South African investment managers in 2022. Throughout the annual RI rating assessment process, we use it as an opportunity to engage with them and bring them along with us on the RI journey. We give recommendations to the investment managers that we believe will positively contribute to their RI practices. It is important that we achieve alignment with our appointed investment managers when it comes to responsible investment principles.

As investors, we have a profound opportunity to make a difference through our investment actions. All UN member states adopted the 17 sustainable development goals (SDGs) in 2015, as a universal call to action to end poverty, protect the planet and make sure all people enjoy peace and prosperity by 2030. Using our strengths and capabilities and doing what we do best as an investment team by identifying sound investment opportunities, we created an SDG framework.

We have selected six SDGs for a more focused approach that also seeks alignment, practical integration, and scale across Momentum Metropolitan. To read more about it, please refer to our Stewardship Report here. This year, we assessed to what extent other investment managers have committed themselves to the SDGs. This assessment did not impact this year’s rating process.

We commit to continually encourage, engage, and support our investment managers on their RI journey, thereby contributing to our clients’ investment experience and build on a sustainable investment outcome. With us, investing is personal.

You can view the results of this year’s rating of our investment managers below or click here to download.

Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services (FSP6406) and registered credit (NCRCP173) provider.


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