BMO Global Asset Management and Lestrade Financial Services have teamed up to launch a service providing pension funds and other institutional investors with ESG reports on third-party managers.
They have created the ESG Due Diligence service, which is conducted by the BMO GAM’s multi-manager team, co-headed up by Robert Burdett and Gary Potter.
The service consists of an assessment of a external manager as well as a separate assessment of how ESG in integrated within a client’s specific investment strategy. This, the firms said, will enable pension funds to inform stakeholders, engage in dialogue with external managers and request portfolio adjustments if necessary, at a time when ESG requirements and standards are becoming increasingly stringent.
“Treating sustainability and ESG as a unique part of external manager due diligence makes it possible to go even more deeply into each relevant sustainability aspect of the manager,” says Bart van Merriënboer (pictured), senior portfolio manager at BMO GAM.
The companies already have a due diligence service model but said they have renewed this collaboration to include a module focused on ESG integration. It draws upon BMO GAM’s experience in responsible investment and manager selection and Lestrade’s background in operational due diligence. Furthermore, BMO GAM is to run Lestrade’s fiduciary manager selection process on its ‘Holly’ due diligence platform, which launched last year to digitally streamline the manager selection processes and communication between stakeholders, starting in the Netherlands.
“The intensity of a due diligence process is enormous,” said Stan Leistra, co-founder of Lestrade. “Collection of the relevant information and analysis are now done entirely online and that is very efficient and helpful for all parties. With Holly, we have a flexible tool that together with BMO GAM can be expanded with further modules, making it possible to stay constantly one step ahead of the market.”
