FAQ: Which SRI agencies are important?

Past

Three years ago this question was easy to answer:

• Every market had one dominant agency…
• (In the UK, this was EIRIS; in France, this was Vigeo; etc)
• …and one secondary player
• In many markets, this secondary player was Innovest (since taken over by MSCI ESG).

Agencies had strong client bases in their domestic markets.

So companies could simply answer the questionnaires of the dominant agency in any market that they wished to target.

Future

In a year’s time, the question will be easy to answer again:

• A company will be able to see from its SRI-CONNECT profile which agencies cover them with SRI research
• The company can then review the profiles of those agencies to see the asset manager and index provider clients of each one
• From this, they will be able to identify which agencies supply SRI research to asset managers or indices that are important to them.

Present

At present, however, the picture is more complicated because a major shakeout of the SRI agency market is underway.

In this interim period, companies have to rely on the growing data on SRI-CONNECT and some simple best practice rules.  These advise companies to prioritise agencies according to:

• the overlap between the agency’s investor clients and the company’s target investors
• the volume of screened assets that the agency supplies research for
• the agency’s influence (where relevant) on any publicly-disclosed sustainability indices

See also: Which questionnaires should companies answer?