Sensitive investment topics analyser (SITA) -Mercer Austalia

Mercer Insights


Mercer’s ‘SITA’ helps investors stand firm on sensitive investment topics


In Hindi, the name Sita means furrow.  It’s an apt connection to a new tool developed in Australia by Mercer’s Responsible Investment (RI) team, called the Sensitive Investment Topics Analyser (SITA).  SITA is a scalable decision-making tool that helps Mercer investment clients identify where they stand on a sensitive investment issue (e.g. investment in tobacco) and what their next step(s) might be to address it within their investment portfolio.  For some clients, it might be divestment; for others, a process of engagement with their underlying managers and/or the companies in which they hold stock as shareholders.  It might even just be a case of monitoring the issue and communicating effectively on it.

The development of SITA is another demonstration of Mercer’s innovative thinking. It’s also very timely as investors, conscious of the investment risks and potential reputational fallout, become increasingly diligent about understanding their exposure to sensitive or contentious sectors.  Simply divesting from such exposures with no regard to investment risk and returns and broader fund objectives is fraught with danger.  SITA is designed help investors steer a safer path.  If divestment is appropriate, then questions concerning the degree of divestment, cost implications and so on need to be carefully considered as well, and SITA helps investors do all of that.

SITA begins with a simple analytical process to identify an investor’s exposure to the investment topic causing sensitivity. It then goes on to use that information, combined with a client’s beliefs, to chart a pathway forward. It’s very intuitive and easy to use. However, SITA is not designed to be used as a self-service tool.  Rather, clients will gain the most benefit from SITA using it with their Mercer investment consultant in an interactive workshop with their investment committee or board.

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