Why ESG factors matter
Financially material environmental, social and governance (ESG) factors can affect the performance of investments. We believe that when companies and other security issuers manage these factors well, they are more likely to be more efficient, less exposed to regulatory and reputational risk, and offer opportunities for our client portfolios.
As a result, we believe assessing financially material ESG considerations in the investment decision-making progress strengthens risk management and may contribute to long-term financial returns.
ESG integration across asset classes
In assets we categorise as ESG integrated under our governance process, we systematically assess financially material ESG factors in our investment decisions, across asset classes and regions, with the goal of mitigating risk and improving the long-term returns of the investments we make on behalf of our clients. ESG integration does not change a strategy’s investment objective, exclude specific types of companies or constrain a strategy’s investable universe.
ESG factors are integrated in our active investment processes in a manner consistent with each investment style. We use a common framework to evaluate and approve the ESG integration approach for each investment group, and conduct ongoing monitoring.