Anne Richards, chief executive of M&G Investments, has called for scorecards to be introduced to measure how much fund managers are investing in assets that benefit society.
‘If there is a perception investment management is taking from society and not providing a benefit in return, then our whole existence and purpose is put into question,’ Richards told the Horizons Fund Management 2018 conference in London yesterday.
To ensure something is given back, Richards proposed the idea of a standardised, comparable scorecard for every fund, whether active or passive, across the industry. This could possibly be tied to sustainable development goals but should focus on ‘areas we want to encourage’.
She said artificial intelligence could make such scorecards much easier to produce.
‘You don’t necessarily need to have armies of people trawling through annual reports
Richards highlighted the evolving role of asset management in society. Beating benchmarks is still necessary, she said, but not sufficient.
‘Politics has played a real part in this, starting in 2016. Society is no longer content with the status quo,’ she said. ‘It is also about investing that money in a thoughtful way, a way that creates jobs, homes and infrastructure in the real economy.’
She pointed out how regulation fills the gaps in how the asset management industry is measured and its interaction with broader stakeholders. But Richards thinks a scorecard a much better way to improve asset manager behaviour.