Philosophy and Approach
Objective: ESG analysis provides a more comprehensive understanding of long-term strategic risks and insights into those investments best positioned to navigate a rapidly changing global environment.
Comprehensive: We believe that ESG data and analysis should be fully integrated into the investment process. External data on a large universe of securities provides a starting point to consider risk while in-depth internal research on portfolio holdings helps us understand how ESG fits into company strategy.
Material: The focus of our ESG analysis and integration is financial materiality – those ESG factors most likely to influence financial performance. Consideration of climate change, corporate governance, human capital management, and many other ESG factors allow us to arrive at more informed investment decisions.
Our approach to ESG integration enables firm-level risk control and a deeper level of analysis within our SI strategies.
Vendor data review: At a high level, our process starts with a review of third-party data and rankings to identify material factors, add context around peer rankings, evaluate historical trends, gauge level of disclosure, and identify key strengths and weaknesses.
Company reporting: A deeper dive into company-level details to better understand the corporate perspective on material ESG risk factors, review current and historical reporting, and assess executive-level sustainability leadership.
Engagement and monitoring: Identify key ESG factors to discuss with management, develop baseline information to monitor and track progress toward targets. On-going real-time tracking of ESG score data and controversies.
Our data-driven platform enables transparency into portfolio-level ESG trends.