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Hermes says Fimalac launch is positive

UK – With increasing concerns among investors about company corporate governance policies, Fimalac’s entrance to the corporate responsibility sector is a step in the right direction for shareholders, says Colin Melvin, director of corporate governance of UK fund manager Hermes.

Referring to the launch of CoreRatings by Fimalac, the owner of Fitch Ratings, Melvin says, “The treatment of corporate social responsibility in this way makes sense for investment managers, that is to look at the risks companies run in this area. Asset management companies are generally interested in social and environmental risks that companies run.”

CoreRatings will issue company ratings based on the assessment of the investment impact of the risks companies are running across the areas of corporate governance, environmental and product liabilities and
social responsibility.

Melvin says he will be interested in how CoreRatings relate to Fitch’s traditional ratings system and the extent to which they are linked. “Some move to connect the two would be very interesting.”

CoreRatings was formed by the management of two European corporate responsibility research companies: London-based Global Risk Management and Paris-based Arese.

Looking ahead, Melvin says it is too early to say whether the system will work as it will depend on who Fimalac will be marketing the research to -- just asset managers or also to companies they are rating.

Hermes, an independent investment manager, has nearly £50bn (e79bn) of funds under management.

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