A group of leading European institutions, which includes pension funds USS and PGGM, have commended 10 brokerage firms for the way they analyse nonfinancial material.
The members of the Enhanced Analytics Initiative - who command total assets of €376bn - encourage
brokerage researchers to analyse “extra-financial” considerations. They will allocate a minimum of 5%
of broker commissions to those who do this best.
“The ad hoc approach taken so far by many brokers has resulted in a rather patchy coverage of different extra-financial issues, sectors and
companies,” says Peter Moon, chief investment officer at USS, the Universities Superannuation Scheme.
“EAI is convinced that, by providing the right incentives, it can support brokers in taking a more systematic approach to this type of research.”
Roderick Munsters, CIO of Dutch health care pension scheme PGGM, says: “EAI is confident that the quality and coverage of extra-financial
issues will improve considerably in the near future but we know this depends on additional clients sending a clear signal to brokers about what they want.
“The most effective way for funds and their managers to do this is to join EAI.”

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