28 Oct 2021

Implementation of RI in Macro Strategies

Macro strategies typically take a view on economic and political outlooks, including macroeconomic principles using country-related instruments, such as sovereign bonds, currencies, or interest rates. This toolbox memo discusses the practical implementation of Responsible Investment in Macro Strategies.

Discussion on Responsible Investment (“RI”) within alternative investment strategies has historically been centred on traditional long only equity portfolios. However, macro portfolios are now also in focus. RI in this space has many nuances in terms of the instruments traded, the jurisdictions issuing the instruments, and political considerations that may be encountered either when determining a “good” or “bad” RI investment or using engagement to try to drive RI related change.

This memo acknowledges that there is no single way to view RI within a portfolio and contains many items that asset managers and allocators should discuss.

This memo looks at the following for the different instruments traded within this strategy:

  • Data availability and reliability, 
  • Responsible Integration: Including financially material RI related risks in the investment process but not pre-defining an investment universe using RI criteria,
  • Responsible Asset Selection: Dedicated RI approaches including exclusions, inclusions, and impact strategies, and
  • Responsible Asset Ownership: Voting, engagement, and activism.