The Responsible Asset Allocator Initiative (RAAI) at New America is focused on mobilizing capital from the world’s largest institutions toward responsible investing and the achievement of the Sustainable Development Goals (SDG) of the United Nations. It is 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 RAAI index provides the first comprehensive analysis of how the world’s largest long-term investors are developing sophisticated new strategies to manage environmental, social and governance (ESG) issues. The index, developed in partnership with the Fletcher School at Tufts, analyzes and rates approximately 200 Sovereign Wealth Funds (SWF) and Government Pension Fund (GPF) comprising $21 trillion in assets, on their responsible investing practices. The RAAI publishes “The Leaders List: The 25 Most Responsible Asset Allocators,” which ranks the top 25 scorers in the index, and also identifies the Finalists, the next highest scoring 25 firms. Together this group of asset allocators sets a global standard for leadership in responsible investing and provides a benchmark for the investment community to follow. Activities of the Responsible Asset Allocator Initiative at New America include: Analyzing the investment practices of the top 200 SWF/GFP and rating them against principles and criteria for responsible investing specifically designed for asset allocator needs. Selecting the top 25 scorers for the “Leaders List: The 25 Most Responsible Asset Allocators” in the world, providing a benchmark of best practices for peers. Gathering together the Leaders List, Finalists and other asset allocators to share knowledge and coordinate collective action. Providing case studies and a matrix of responsible investing practices. Setting a policy agenda and advocacy program to facilitate greater investments into the SDG. Advocating for responsible investment action on climate change. SWF and GPF SWF and GPF invest capital on behalf of the people of their states to pay for their retirement benefits, healthcare and long-term savings. Because of their size and scope, when these institutions invest, they exert a gravitational pull on companies, projects and capital markets and can affect real change on issues such as climate change, sustainable infrastructure, and access to education, food, clean water and healthcare. For example, just a one percent allocation of the AUM of the asset allocators rated in the RAAI would be 2.3x greater than all official development assistance extended by the World Bank Group in 2018. Incorporating long-term environmental, social, and governance related concerns into the investment decision-making process helps SWF/GPF optimize returns, reduce risks, and identify opportunities for future growth, all while aligning portfolios with broader goals of society.
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