Investing sustainably involves considering not just how companies are managed but other issues too – from the impact they have on the environment to the roles they play in society. Investors are embracing this approach because there’s mounting evidence to suggest these issues affect how companies perform.
Sustainability can often be a subjective topic but environmental, social and governance (ESG) factors provide a useful set of standards to assess investments. By incorporating these measures into our investment processes, we can manage risk more effectively and improve returns.
We’re committed to being active investors and strive to be responsible stewards of our clients’ investments within a framework of good governance and transparency. Core to our investment philosophy is the belief that well-governed companies are better positioned to manage the risks and challenges inherent in business and to capture opportunities that help deliver sustainable growth. We firmly believe that effective stewardship will benefit companies, our clients and the economy as a whole.
We incorporate ESG factors within our investment process using a scoring system for each fund. We base these scores on a range of issues, including how the managers run our funds, as well as the ESG characteristics of the individual investments they hold. We clearly take environmental and social issues seriously and we only work with investment managers that are aligned to our approach. This approach includes spending time with our investment managers to understand their approaches to ESG and how they use their influence as shareholders to drive change and maximise returns.