ESG integration

Responsible investment principle: where possible, we consider environmental, social and governance (ESG) factors in the evaluation of investments  we hold directly for you, to help identify ESG opportunities and risks

We believe that ESG issues – both risks and opportunities – can affect the long-term performance of investments. We therefore need to think about these factors when building portfolios for clients and making investment decisions. This involves ESG integration: the inclusion of ESG considerations alongside financial analysis to inform investment decisions. 

A more comprehensive view 

We aim to develop a more comprehensive view of a business’ strategy, the way it executes this strategy and the dynamics of its sector than can be achieved solely through a financial lens. We do this by using ESG data, engaging with companies and exercising our carefully considered judgment. This helps us identify companies with stronger sustainability performance. It also identifies companies where, through engagement, we see potential to improve business practices to create value for shareholders. 

Examples of environmental, social and governance (ESG) considerations are: 

  • Environmental: we examine the challenges and opportunities faced by companies because of climate change, resource management, new regulations and other environmental challenges
  • Social: we monitor the legal or reputational risks faced by companies to ensure they have strong policies and procedures in place to deal with issues such as employee relations, community impacts and human rights risks
  • Governance: we review factors that illustrate the quality and robustness of a company’s internal structure and practices. This includes issues such as executive pay, board composition and audit, as well as standards of business ethics.

See our responsible investment report for more information about ESG integration.