ESG, Diversity and Inclusion, and how your firm is handling operations during the current pandemic are all becoming very hot topics on RFP questionnaires. The heightened awareness of these issues are an effort for advisers and industry professionals to better understand how your firm integrates these factors into your investment processes, as it shows a level of diligence and preparedness that can be critical, especially as we continue to navigate an uncertain time.

    To help streamline the way your firm responses to inquiries on any of these matters, I’ve included below a list of the most commonly asked RFP questions for each topic. Hopefully this will help you define what they mean to you as a company and articulate how they do or do not play a role in your investment philosophy and firm operations.

    ESG and Responsible Investing

    1. Does your firm have an existing ESG/RI policy in place? If yes, please provide a copy of the policy, if there is no current policy, please describe your plan or explain the rationale.

    2. Please indicate the methods of firm internal oversight and reporting of ESG/RI incorporation across the organization.

    3. Please explain how your firm verifies that the ESG/RI policy is being followed for the strategy(ies) that is/are the subject of this RFI, as well as at the firm level.

    4. Has your firm or product(s) undergone any type of ESG/RI audit? If so, please indicate who conducted it, when it was last conducted, the scope of the audit, and the frequency it is intended to repeat.


    5. Please describe how ESG/RI responsibilities are organized within the investment team(s)

    6. Does your firm employ any ESG/RI professionals?

    7. Please describe what kind of ESG/RI training is provided to the employees.

    8. Please describe what ESG/RI data, research, third-party consultants, resources, tools, and practices your firm/team uses. How are these incorporated into the investment and risk management process?

    9. Have there been any changes to your firm’s/team’s ESG/RI incorporation process over the past twelve months (e.g. additional resources, information sources)?

    10. Please explain how active ownership practices, both voting and engagements, are integrated into investment decisions. Please provide examples of your engagement on ESG/RI issues.

    11. Please provide examples of where and how ESG/RI risks and opportunities were incorporated into the firm’s/team’s investment decisions over the past 12 months.

    12. Does the firm/team negatively screen on any factors or areas of the market?

    13. Please describe what metrics (internal and/or external) your firm uses to measure its progress in incorporating ESG/RI into the investment process.

    14. Does the firm assess and monitor its products’ exposures to climate risk and carbon footprint of the investment portfolios? If yes, please explain the assessment process. If not, are there any such plans in the near future? Please elaborate.

    Diversity and Inclusion

    1. Is the firm certified as any of the following: Women-owned entity, minority-owned entity, both or neither?

    2. What percentage of your employees are women?

    3. What percentage of your employees are minorities?

    4. What percentage of the investment team is women or minorities?

    5. What percentage of senior leadership is women or minorities?

    6. What percentage of the firm’s assets under management are managed by women or minorities?

    7. Does the firm have a formal diversity and inclusion policy or initiative? Please provide, if so.

    8. Does the firm have a stated Diversity and Inclusion goal / mandate and/or targets? If yes, do you have targets for what you would like to see over the next 5-10 years?

    9. Is your leadership compensation tied to the fulfillment of the firm’s Diversity and Inclusion goals?

    10. Does your firm have unconscious bias training for all individuals involved in investment decisions?

    11. Does the firm have a formal mentorship program for minorities and/or women?

    12. Does the firm work with organizations that promote the attraction and retention of women and minorities?

    13. Please provide details on the firm’s efforts to promote, attract and retain women and minorities.

    14. What are the names of any third party organizations / affiliations the firm supports in the area of Diversity and Inclusion (if applicable)?

    15. Have there been any claims of sexual or general harassment, misconduct or discrimination against any current or former firm employees (while employed by the firm) within the last 5 years? Please provide details, if so.

    16. Please provide the firm’s definition of the following terms used to provide the responses above: (1) Minorities and (2) Diversity & Inclusion

    Pandemic Related

    1. What procedures or controls have been modified or added as a result of the COVID-19 pandemic? Please briefly describe or provide the amended procedures.

    2. What percentage of your employees are working remotely?

    3. Have your staff experienced any connectivity issues or hiccups while working from home?

    4. How does the firm address cybersecurity as partners and employees work from home?

    5. Are any of your partners, employees, and consultants under voluntary or required quarantined? Please provide details if Yes.

    6. Has the firm or product(s) experienced any issues with the service providers, such as administrator, auditor, custodian, broker, technology vendor, and other service providers? Please provide details, if so.

    7. Have you made any changes to the current trading process or experienced any issues with trading for the product?

    8. Has your firm invoked your BCP?

    9. If so, what was the rationale for the firm’s decision as it relates to invoking your BCP?

    10. Is a pandemic emergency response a part of your BCP?

    11. What is your ongoing communication approach, both internally to employees and externally to clients and business partners? Please include any recent public communications related to COVID-19 in your response.

    12. Can you provide commentary around expected business impacts from COVID-19?

    13. Do you expect to maintain the current size and capabilities of the investment team for the foreseeable future?

    14. What tools, technologies and resources are utilized to facilitate collaboration of employees in this environment?

    As you move through the RFP process, it’s important to be thorough and prepared, without losing a lot of time in the process. Have you read part one of our RFP series, The Top 80 Questions You Need to Answer on an RFP?

    Feel free to reach out to me with any questions or further clarification on the suggestions mentioned above, I’m happy to talk through this process with you. I can be reached at (610) 620-5384 or trogers@dakota.co.

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