Northern Trust has added Socially Responsible Investing guidelines to its web-based Compliance Analyst tool, which monitors investment portfolios that are nearing or have breached established limits.
Northern Trust has formed an agreement with Institutional Shareholder Services (ISS), a provider of corporate governance and SRI data, to provide research through Compliance Analyst to determine whether institutional and wealth management clients are investing in companies that derive revenue from potentially restricted areas. Users will be able to select from 10 socially responsible investment restrictions:
*
Adult Entertainment*
Alcohol*
Animal Testing*
Board Diversity*
Contraceptives/Birth Control*
Firearms and*
Gambling*
Labor Relations Disputes*
Tobacco*
Weapons Production
“Socially responsible investment programmes are a growing area of interest for both institutional and high-net-worth investors, and we are sure these new guidelines will be welcomed by Compliance Analyst users,” says Lenora Kelley, Senior Vice President, Risk Services Manager for Northern Trust Investment Risk and Analytical Services. “Compliance Analyst is client-driven and automated, monitoring compliance with investment policy restrictions across all managers and asset classes and promptly notifying clients when an investment parameter has been breached. This keeps investors informed but limits paperwork, so they can focus on other priorities.”
The new SRI capabilities for Compliance Analyst rely on ISS’s environmental, social and governance (ESG) screens, which aim to identify companies that derive revenue from a particular source, such as tobacco, alcohol or gambling. Compliance Analyst enables users to set tolerance levels for SRI guidelines, so that none, or no more than a set percentage, of a portfolio’s holdings are invested in the restricted industry or activity. ISS also provides access to research on screened companies, so investors can see the details of that company’s business practices.
“We are pleased to help Northern Trust deliver the first comprehensive screening tool at the custodian level to monitor the most widely adopted social investment restrictions embraced by faith based institutions and SRI investors,” says Mark Tulay, SRI business development director for ISS. “ISS and Northern Trust share a commitment to industry leadership and our partnership related to Compliance Analyst is indicative of the value Northern Trust and ISS bring to investors.”