ESG factors matter
Environmental, social and governance (ESG) factors are non-financial considerations that can affect the performance of investments. When companies and other security issuers manage these factors well, they are more efficient, more aligned with consumer preferences and less exposed to regulatory risk.
As a result, we believe incorporating ESG considerations in the investment decision-making process strengthens risk management and may contribute to long-term financial returns.
• Greenhouse gas emissions
• Climate change resilience
• Pollution (air, water, noise, light)
• Biodiversity/habitat protection
• Waste management
• Workplace safety
• Cybersecurity and data privacy
• Human rights
• Local stakeholder relationships
• Discrimination prevention
• Independence of chair/board
• Fiduciary duty
• Board diversity
• Executive compensation
• Bribery and corruption
We systematically assess financially material ESG factors in our investment decisions, across asset classes and regions, to mitigate risk and improve the sustainability of the investments we make on behalf of our clients.
ESG factors are integrated in our active investment processes in a manner consistent with each investment style. Download the ESG integration approach for your chosen investment group.
Robust oversight and monitoring
Firmwide ESG integration resources
Across investment groups, ESG integration approaches benefit from shared global knowledge and resources. In addition to the ESG insights of individual investment desks, we have developed and are implementing globally consistent, data-driven proprietary ESG scoring.
Further reading
For certain strategies that the adviser determines to be ESG integrated, the adviser integrates financially material environmental, social, and governance (“ESG”) factors as part of the Fund’s investment process (“ESG Integration”). ESG Integration is the systematic inclusion of ESG issues in investment analysis and investment decisions. ESG Integration is dependent upon the availability of sufficient ESG information for the applicable investment universe. In addition, in order for an actively managed strategy to be considered ESG integrated, the adviser requires: (1) portfolio management teams to consider proprietary research on the financial materiality of ESG issues on investments; (2) documentation of the adviser’s research views and methodology throughout the investment process; and (3) appropriate monitoring of ESG considerations in ongoing risk management and portfolio monitoring. ESG determinations may not be conclusive and securities of companies / issuers may be purchased and retained, without limit, regardless of potential ESG impact. The impact of ESG Integration on performance is not specifically measurable as investment decisions are discretionary regardless of ESG considerations.
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