INDOS Financial, the UK-based independent depositary firm is piloting an ESG oversight service, which will evaluate fund managers’ sustainable investment processes.
Bill Prew, chief executive officer of INDOS Financial, explained that the company is about to embark on a trial service in response to growing industry demand for the independent verification of fund manager’s ESG policies.
“There is a whole swathe of the industry that would like to take some comfort in knowing that managers are taking this seriously and don’t simply have a policy that is gathering dust in a drawer,” Prew explained in an interview.
“We are in the development phase and are talking to a number of firms to line up trial services. One is in the hedge fund space and one is in the private equity space.”
INDOS is hoping to begin its trial service by the end of the first quarter of 2019, according to Prew, with growing interest in an ESG verification service noted in conversations with companies in the group’s existing client base.
“For us, we are at an early stage of developing something which the market doesn’t have at the moment,” Prew said.
“Over time, the service will become more sophisticated, but there is no one size fits all approach. The nature of the service means that it is never going to be a commoditised thing.”
The company plans to work with law firm and social finance consultancy Prime Advocates to develop the service which will be delivered under the INDOS Financial brand.
“I think there is going to be a drive towards the continuous review of managers, to ensure they are complying with their policies, by screening portfolios against various data sets,” Prew added.
“We are going to work out what the best data sets are to use, and the necessary commercials around it.”