The company’s securities lending clients can now elect to invest cash collateral under socially responsible investment (SRI) principles that consider environment, social and governance (ESG) factors, Citi said. It said that the new service allows clients to meet their SRI goals while optimizing portfolio performance.
Citi says that according to the European Sustainable Investment Forum (Eurosif), as of 31 December 2010, over $11 trillion of assets were managed globally under SRI strategies. But without an SRI capability for the investment of cash collateral, firms that manage SRI strategies have found it difficult to participate in securities lending programs, Citi says.
The custodian of $13 trillion of assets developed its new offering in partnership with Sustainalytics, an ESG research firm, and will make the service available to securities lenders through boutique service OpenLend^SM.
“Money managers are increasingly incorporating ESG factors into their investment analysis, decision-making and portfolio construction process, creating new demands for investing products and services,” said Tim Douglas, global head of securities finance in Citibank N.A.’s global transaction services division.
“We are responding to our clients’ needs with a solution that supports SRI requirements and reinforces our commitment to run our business in a manner that benefits society and the environment,” Douglas added.