Table of Contents
- I. Introduction
- II. Asset Allocators, Principles, and Criteria
- III. The RAAI Index and Leaders List
- IV. Why the Leaders Matter
- V. Key Findings: Are Global Asset Allocators Becoming More Responsible?
- VI. What’s New? Comparing the 2021 and 2019 RAAI Leaders List
- VII. Methodology
- VIII. Glossary of Terms
- IX. Scorecards
- X. Previous and Current Award Winners
- XI. Appendix: Ten Recommendations for Success in Responsible Investing
I. Introduction
The Responsible Asset Allocator Initiative (RAAI) is focused on mobilizing capital from the world’s largest institutions toward responsible investing and the achievement of the United Nations’ Sustainable Development Goals (SDG). By developing our biannual RAAI Index, which provides the first comprehensive analysis of how the world’s largest long-term investors are developing sophisticated strategies to manage environmental, social, and governance (ESG) issues, we construct a window into the future of investing, a world where global savings institutions deploy funds not only to achieve financial returns, but also to address the broader social and environmental challenges we face today.
The Index, developed in partnership with the Fletcher School at Tufts University, analyzes and rates approximately 250 sovereign wealth funds (SWF) and government pension funds (GPF), comprising $26 trillion in assets, on their responsible investing (RI) practices. The RAAI publishes The Leaders List: The Most Responsible Asset Allocators, which this year ranks the top 30 scorers in the index, and also identifies the finalists, the next 22 highest scoring firms. Together this group of asset allocators (the top quintile) sets a global standard for leadership in responsible investing and provides a benchmark for the investment community to follow.
The RAAI rates funds for the Index based on 10 key principles and 30 criteria related to ESG and RI (see Methodology for more information). Since the RAAI launched in 2016, global asset owners have been upping their game on ESG, with the average global RAAI score reaching 52 percent in 2021, up from 48 percent in 2019 and 44 percent in 2017. In 2021, we’re seeing that Europe, especially Denmark, the U.K., and the Netherlands are at the forefront of RI implementation and innovation while the United States continues to lag behind. Overall, RI is advancing across the globe, but from a low base; there remains a large divide between the top quintile performers and the rest of the world.
Responsible investing is a critical component for solving complex, global challenges, and global asset allocators have the capacity to make a significant difference. When these institutions make investments, they exert a gravitational pull on capital markets and can drive funds towards fighting climate change, increasing sustainable infrastructure, and improving access to education, food, clean water, and healthcare. Through continually revising our criteria with each new edition of the Index and by adding to our universe of rated funds, the RAAI is evolving alongside ESG issues to drive innovation and leadership in responsible investing.