It may not be obvious to their clients and investors, but there is an inherent struggle facing global fund managers when it comes to integrating responsible investments into their organizations, particularly those related to environmental, social and governance (ESG).

On one hand, there is the need to have a single formal, unifying framework around ESG that encompasses the firm's policies, organizational structure, investment strategies, and approaches to education.

On the other hand, there is the realization that there may be no single uniform way of integrating ESG across a global asset management firm’s organization when it has different businesses, asset classes, as well as, products and solutions, without risking oversimplification and sacrificing creativity.

This is the lesson based on the experience of Man Group, which recently appointed two co-heads of responsible investment as part of the integration of ESG into its organizational structure. Having two co-heads for responsible investment basically split the ESG-related responsibilities.

One co-head for responsible investment is Jason Mitchell, who is in charge of ESG investment-related issues and reports directly to the chief investment officer, Sandy Rattray. Mitchell was previously the sustainability strategist at Man Group and a member of the Responsible Investment Committee.

The other co-head for responsible investment is Steven Desmyter, who is in charge of responsible investment-related client servicing and reports directly to Man Group's chief executive officer Luke Ellis. Desmyter, alongside Jason, is co-chair of the Responsible Investment Committee.

The two co-headed structure for responsible investments, which was formalized in July, marks the first time Man Group has a dedicated role in the ESG space. It also formalized the ESG reporting structure and hierarchy in terms of making it more investment specific.

With this two co-head structure, Man Group attempts to address the dilemma of having a single unifying framework for ESG without sacrificing the creativity and risking oversimplification.

In an interview with The Asset, Mitchell explains: "When you look at individual strategies within responsible investment, like ESG, we don't think there should be a single unifying approach to the integration of ESG across our firm."

"First, pragmatically, an approach like that would be difficult, because we have so many different strategies. We have two different quantitative investment engines and we have a private markets engine, as well as many different strategies in terms of equities, debt and alternatives," Mitchell says.

Man Group currently has five business units with total assets under management (AUM) of US$114.1 billion as at September 30, 2018.

These include:

· Man AHL is a diversified quantitative investment manager offering absolute return and long-only funds

· Man Numeric which offers long-only, active extension and hedged equity strategies

· Man GLG is a multi-team discretionary investment manager; Man FRM, a multi-disciplinary research and investment unit

· Man Global Private Markets Group, a real estate private markets business.

"What we want to do as a firm is create the policy, organizational and educational make up, and platform of analytical tools that go beyond the reporting requirement that can enable the different investment engines and investment teams within those engines to integrate ESG, in the most relevant way. And then, in other cases, in ways that fortify the natural investment process," Mitchell says.

At present, Man Group's most active ESG integration program is taking place within Man Numeric, its US$34.7 billion systematic global fund and Man GLG, its US$38 billion discretionary account business.

Man Group is also building a proprietary ESG analytics system that will allow the company to collect data from external data providers, dissect the data, disaggregate the data, figure out the idiosyncrasies between the data, and find better score granularity among ESG data providers.

"Where we think we can differentiate ourselves and add to this conversation is not only in building out this proprietary ESG framework but ultimately saying, we've got this interesting score that we've produced that we really think is more effective," Mitchell says.