Understanding the accountability and reporting practices on sustainability performance developed by the ethical mutual funds in the UK

Lopez, Angelica (2010) Understanding the accountability and reporting practices on sustainability performance developed by the ethical mutual funds in the UK. [Dissertation (University of Nottingham only)] (Unpublished)

[img] MS Word - Registered users only
Download (681kB)
[img] PDF (Word to PDF conversion (via antiword) conversion from application/msword to application/pdf) - Registered users only - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Download (340kB)


The SR mutual funds have incorporated different approaches into the traditional investment criteria to tackle sustainability issues such as positive or negative screening, engagement, integration and best in class. These strategies seek to satisfy the variety of clients` values and interests and manage accordingly the investment`s risks. This offer of products not only generates financial profits, but also sustainability returns.

The growth of the SR retail investment showed over last years reflects the genuine interest from retail investors in being informed about these products. The satisfaction of this demand must be supported by reliable and complete information. Since the sustainability returns are of increased interest from potential investors and other stakeholders, it is therefore fundamental an adequate communication of these achievements to dynamize the market in a greater scale. Given the scarcity of information in regard to sustainability reporting within the SR mutual funds industry the objective of this project points to get an understanding of the current accountability and disclosure practices on environmental, social and corporate governance performance developed by the FMCs which belong to this sector.

This research is focused on four areas: ESG investment analysis, ESG investment and implementation, Engagement practices and voting policy, and Characteristics of the SR mutual fund reporting. This structure not only includes an analysis of the reporting process itself, but also comprises an understanding of the core processes that back up the performance results to be disclosed to the stakeholders. The data to carry out this research were obtained from the responses to the European SRI Transparency Code provided voluntarily by some SR mutual funds. The structure and content of this questionnaire is aligned with the research areas.

One of the main findings of this research is the disclosure of good intentions to work issues around sustainability but a lack of disclosure to prove what has been done regarding targets and impact. The main cause of this problem is the lack of clarity in defining what the expected outcomes are and the justification to do so. Given the lack of regulation in this area the FMCs have assumed the task to setting up the tone to carry out the sustainability strategies and monitor them to satisfy the investors` interests. This function has not been satisfactory enough. Another cause is the inexistent government`s role within this market as regulator and promoter of the development of the SR retail investment sector. The lack of accountability principles to establish the ESG performance criteria is missing as well as the reporting parameters to communicate the progresses made.

Without a report including information on performance aligned with strategic objectives and in a quantitative format, the SR retail mutual funds will continue seen as a marginal investment option. It is imperative to take action coordinately at the management, industry and systemic level to promote the development of the sector and enhance its potential benefits.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 08 Nov 2010 14:44
Last Modified: 21 Mar 2022 16:07
URI: https://eprints.nottingham.ac.uk/id/eprint/23814

Actions (Archive Staff Only)

Edit View Edit View