Asset owners and fund managers use Trucost's comprehensive data and analysis on corporate environmental impacts to apply the UN Principles for Responsible Investment, as outlined below.

The Principles Asset Owners Fund Managers
Principle 1
We will incorporate environmental, social and governance (ESG) issues into investment analysis and decision-making processes.
  • Understand the carbon or environmental footprints of funds.
  • Monitor fund exposure to environmental costs.
  • Identify how decision-making by portfolio managers contributes to environmental risks in funds.
  • Measure the environmental impacts of funds.
  • Understand how sector allocation and stock selection decisions contribute to fund environmental performance relative to benchmarks.
  • Understand company and fund exposure to rising environmental costs under "polluter pays" legislation.
  • Identify leaders and laggards on carbon or environmental performance.
Principle 2
We will be active owners and incorporate ESG issues into our ownership policies and practices.

Principle 3
We will seek appropriate disclosure on ESG issues by the entities in which we invest.

Principle 4
We will promote acceptance and implementation of the Principles within the investment industry.
  • Hold informed discussions with managers of funds that have the greatest environmental impacts.
  • Ask investment managers to measure greenhouse gas emissions at a portfolio level to identify carbon risks and opportunities.
  • Include criteria on carbon or environmental impacts in fund manager selection, investment mandates and performance monitoring.
  • Engage with investee companies that have the greatest value at risk from environmental costs.
  • Target companies with poor disclosure and performance on environmental issues compared with sector peers.
  • Reduce fund exposure to environmental costs by picking best in sector companies.
  • Managers of passive or active funds can optimise investment strategies to favour companies with greater carbon or environmental efficiency relative to sector peers, while maintaining financial returns and diversification.
  • Develop new opportunities to invest in resource-efficient companies that are well-positioned for rising environmental costs.
Principle 5
We will work together to enhance our effectiveness in implementing the Principles.

Principle 6
We will each report on our activities and progress towards implementing the Principles.
  • Report annually on the carbon or environmental footprints of funds.
  • Provide beneficiaries with information on the environmental impacts of their investments.
  • Demonstrate that environmental risks to company valuations and fund returns are measured and managed in a systematic way.
  • Communicate your activities to actively protect shareholder value from environmental risk with supporting data.
  • Report on progress in managing portfolio environmental risks and opportunities.

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