Responsible
Investing is about the future, so let us make sure it is a good one.
Responsible investing
Environmental, social and governance (ESG) considerations feature in all aspects of our advice. We ensure that clients discuss and write responsible investment policies in governance documentation, model environmental shock scenarios in our asset allocation model and consider ESG aspects within our research of investment managers.
Our advice in this regard is often supplemented with educational training to ensure our clients remain abreast of the latest developments and investment options for responsible investing.
ESG Category
Most investment managers have an answer to the question of how ESG is incorporated into their investment process. This can make it difficult for investors to assess and compare the degree and effort applied to ESG in their investment strategy. Our manager research strives to ensure that clients have an understanding of how extensive ESG criteria are applied in practice.
We differentiate between investment products by assigning an ESG category:
Impact
Fund a targeted purpose.
Promote
Invest in the good.
Avoid
Exclude the bad.
Low
Not a primary consideration.
ESG Rating
Analysis of ESG considerations are integrated across multiple areas within our manager research. This includes ESG criteria in the investment process and the contribution of unique ESG insights from the portfolio management team. Furthermore, we evaluate the application and implementation of ESG factors in the day-to-day management of the portfolio and seek evidence of engagement on ESG issues.
We draw on these assessments to inform an ESG rating:
Strong
Leading peers.
Above
Considered and applied.
Basic
Considered but weak application.
Below
Little to no consideration.
Culture, diversity and inclusion
We believe it is important to assess not only what investments are held in a portfolio of an investment manager, but also review the people involved in managing it. As part of this review, we consider the diversity and inclusion of an investment team. While this rating and all ESG sub-area scores inform our overall rating, we can readily produce tailored ratings that directly capture our clients’ preferences.