We incorporate ESG factors as an integral part of our investment process. We have been following this approach since the firm was established in 1973.
Our ESG research is conducted in-house and integrated into our investment analysis across all asset classes. Investment analysts are responsible for researching material ESG issues relating to the instruments they cover and highlighting these in their research reports. Key ESG issues are debated when we discuss investment opportunities and vote on “buy” or “sell” ratings. ESG risks are factored into company valuations, either by adjusting earnings or cash flow if the risk is quantifiable, or by valuing the company or division on a lower multiple if the downside risks are significant but uncertain.
The Investment team includes both a governance analyst and an environmental and social analyst, who perform additional monitoring, in-depth research into identified risk areas, and thematic ESG research. We also have a Research Library, which monitors company-specific ESG news and shares relevant news items with the team.
We always aim to do what we believe is right. This does not mean taking a binary view on whether investments are “good” or “bad” and making related portfolio exclusions or inclusions. Instead, we undertake fact-based, in-depth, and holistic research to inform our investment decisions.
We continue to monitor ESG factors once we are invested. This is crucial because ESG issues are dynamic and sometimes concerns may only arise once we are invested. Where we are invested in instruments that have negative environmental or social impacts, we encourage a focus on minimising harm and holding management and boards to account.
We believe that good stewardship of our clients’ capital requires truly active ownership. We engage frequently and meaningfully with company boards and management teams and think critically about how we vote on behalf of our clients at company meetings. In addition to engaging with our investee companies, we actively partake in initiatives that promote sound corporate governance and sustainable business practices.